Most people are used to monthly subscription plans since they are the typical business model for services that run continuously. Netflix and Hulu and other video streaming services make use of them as they are more convenient than paying for every episode. However, this kind of business model is generally unheard of in the transportation industry, but Atlanta, GA-based tech company Lyft is testing the waters for its use.
Various sources have reported that the ride-hailing service is sending an invite to select riders to try out their subscription plan which is called the All-Access Plan. Aside from being an invite-only feature, prices vary from person to person which simply means that the company is still trying to figure out the perfect pricing. According to some people, the company offered them $199 for one month and with it, they get 30 free rides as long as the fare is not more than $15. This means that Lyft is effectively giving them $450 worth of free rides per month.
However, as the company is still deciding on the best pricing to do, some users are reporting different offers. A different source reports that the company offered them a $49 per week plan with seven free rides not exceeding $15 for the fare. This means that effectively, you are getting a weekly subscription with a total value of $105 worth of rides. The company assures the users that there are no hidden charges. For people who regularly use the ride-hailing service with daily trips that don’t exceed the limit, this subscription model is definitely worth it as it will incur big savings in the long run.
What This Means for the Future
Right now, the company is still testing this new subscription model and it is unsure whether or not the company is planning to replace its current business model or is simply offering this as an alternative payment option. It is expected that the company will officially make its new subscription model public and will make it available for all users.
With this new payment mode in mind, ride-hailing services will probably grow more and more in number.
Numerous analysts have tried to predict what this increase will mean for the millennials buying their first cars, and for the car manufacturers that make them. There was a lot of fear and speculation that these services will eventually kill the automotive industry as people will buy fewer cars as these ride-hailing services become more numerous, become less expensive, and become easier to access.
Recent reports show that this isn’t the case as a lot of operators are actually buying new cars to be used for these services and since they act just like taxi services, they depreciate just as quickly. This eventually evens out since the operator will have to buy a new one more often. However, this also means that there are effectively less cars operating on the roads at a given time which will lead to less traffic and faster travel time.
Whether or not Lyft’s new subscription plan will become a success is anyone’s guess. The good news is that these continuous innovations only ensure that these ride-hailing services are here to stay.