Uber is rolling out a new subscription package similar to Amazon Prime that will allow customers to pay a flat fee for a bundled up service. The major services to be part of the subscription would include ride hailing, Uber Eats food delivery, as well as bike and scooter rentals. The new subscription model is already being tested in a number of major cities including Chicago and San Francisco. The plan is to start rolling it out in other markets as soon as possible.
The all-in-one pass will cost $24.99 a month. The fee will also allow subscribers to have a fixed discount on all rides. It will also make them eligible for free Uber Eats delivery as well as additional free rides on bikes and scooters. The ride-hailing giant has also noted that it is testing another more affordable all-in-one pass in other cities. The pass will give subscribers access to discounted rides as well as free deliveries on orders that reach a certain amount.
The idea of charging a flat fee on a monthly basis is actually not new for Uber. Just last year, the ride-hailing service introduced its Ride Pass subscription service that made it possible for customers to lock in flat rates in all UberPool, UberX, and Express Pool trips. Uber also notes that the flat rate is based on users’ historical data. The company believes that it will be able to save riders up to 15 percent in overall monthly travel costs.
But there’s also one clear advantage. The Ride Pass fees are not affected by typical external events such as traffic, weather, or a surge in pricing. There are no limits on the number of rides a customer can take at any given time as long as the fee has been paid for that month. Ride Pass is available in about 24 markets right now.
Many experts see the proposed new subscription model as one of the ways Uber could be exploring in trying to drag itself towards profitability. Despite reporting exponential growth in recent years, Uber has not yet been able to report a profit. A subscription service that allows the company to lock in a predetermined amount of recurring revenue each month could be a massive boost towards profitability in the longer term.
Uber is hoping to become the one-stop shop for transport and delivery all over the world. A subscription model seems like the most suitable way to charge customers if indeed the company wants to start making money from its exponential growth. Uber is also planning to start a driverless taxi service. The plan is to deploy these cars in the future essentially getting rid of drivers. This would probably help the company increase its net return but we are still not there yet.
Uber will also face massive competition in the driverless taxi sector. Companies like Tesla and Google are already looking at driverless car services too. Nonetheless, if indeed Uber is able to get more and more customers signed up to its subscription model, it could be great news for the company in the near future.
