NASDAQ-listed ride-hailing company Uber is now exploring a subscription model to offer bundle of its services. The combination of services available on this monthly pass would reportedly include Uber rides, Uber Eats and JUMP (bike and scooter) rides.
The variants of this subscription service are being tested in San Francisco and Chicago. This service includes a fixed discount on every ride, free UberEats delivery and free rides on their scooter service, JUMP. This subscription pass will cost $24.99 per month.
Also in other cities, Uber is testing lower-priced passes that offer discounted rides and free delivery on Eats orders above a certain amount.
An Uber spokesperson reportedly said, “From meals to wheels and everything in between, we’re always looking for ways to make Uber the go-to option for your everyday needs.”
A monthly subscription model is nothing new for Uber. The company had introduced Ride Pass in October last year. At a standard monthly fee based on the distance you choose, a rider can buy a ride pass for their Uber rides.
However, a combination of services for Uber Eats, scooters and rides is a new phenomenon for the company. Though this makes complete sense and would be a lucrative move for Uber, as it locks customers into spending more money on Uber.
In India, Uber’s arch rival Ola already offers a subscription model similar to Uber’s Ride pass. Today, subscription-model has become an essential part of businesses. From SaaS to fintech to media and entertainment, every industry is today bouncing on the opportunities of creating a stickier user base through subscriptions.
Particularly for micro-mobility segment, where the challenge includes brand loyalty for both— drivers and customers. While for drivers, Uber has been experimenting with benefits such as education etc, for customers, a subscription model may crack its returns.
Horace Dediu, cofounder of Micromobility Industries, has suggested micro-mobility companies to offer a subscription model which goes door-to-door making it seamless.
The development also seeks relevance at a time when Uber has been struggling to stick ground in India. The number of daily rides has increased by a mere 4%, from 3.5 Mn to 3.65 Mn in the past six months.
Industry experts and sources said that customers today see longer wait times — from an average 2-4 minutes two years back to 12-15 minutes now. This is coupled with higher fares, around 15-20% in non-peak hours in major cities.
Uber went public in May, and has accepted that it may never make profits. The value it has created in the urban mobility across the world coupled with its dominated markets such as the US continue to support its ambitions. Even though in India, the company has been slowly losing its battle for market dominance and settling for being the number two after Ola.