Subscribing to Uber? What's the taxi equivalent of Prime's free delivery
Tuesday 15 May 2018Article
Lyft are rolling out the subscription package they have been trialling for a while. It's focused on bundles for heavy users, selling $15 off 30 rides (worth $450) for $200.
The heaviest taxi users are, interestingly, the most disloyal – they will hail, use black cars, have Lyft, Uber and probably Juno on their phones, and know the right situation to use each. Heavy users also make up a disproportionate share of volume, with a median user taking around a journey a month, but the heaviest users taking more than 500 journeys a year.
These very frequent users are an important battleground for Uber and Lyft, so subscription or prepayment schemes to lock them into their platform – like Amazon Prime in retail – are clearly of interest. Uber has trialled similar schemes before (e.g, Uber Ride Pass) but they haven’t gone mainstream.
Based on OC&C's analysis, the heaviest users are expensing a large portion (but not all) of their trips, so a pre-paid bundle becomes a bit awkward in this context. A better loyalty mechanic might be to allow consumers to “earn” loyalty on expensed weekday journeys, which could be spent at the weekend. Or the wealthy customers who are the most frequent users might be prepared to pay a Prime fee in exchange for priority wait times, priority access to upgrades, or to avoid weekend surge pricing.
Endless A/B testing (and maybe a bit of strategic thinking!) will no doubt lead ride hailing companies to the right solution. Meanwhile, the subscriptionization of mobility marches on!
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