Uber recently announced a monthly ride pass feature for passengers that promises discounts on rides and other benefits. What does that mean for drivers, and what do riders get out of the pass?
Mark from UberHints on YouTube recorded a good, comprehensive video about the new ride passes. Take a look at his video, then scroll to the video transcript to see the points he covers.
Uber just announced they are making monthly passes available. What does that mean to you as a driver? What does that mean to you as a rider? Let’s talk about it.
How much do Uber ride passes cost?
Welcome, everyone. Mark here from Uber Hints. Uber recently announced that they are going to begin selling monthly passes. Monthly passes are going to cost $14.99, unless you live in Los Angeles, then it’ll be $24.99. You know everything’s more expensive in LA. Well, it’s not more expensive than if you live in Hawaii, but it’s more expensive than anywhere else, right? We won’t get into why. Some of those cities include, I believe, Denver, Austin, Los Angeles, of course, Miami, Orlando.
What does this $14.99 or $24.99 get you? Well, one of the things they’re saying is it will save surge pricing. In other words, you can avoid the surge if you buy this monthly pass. You’re kind of taking a gamble. It’s a roll of the dice, right? You can buy this for $14.99. Now, if you know that you do surge rides a lot, it might be beneficial to you as a rider.
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The big benefit of the ride pass is protection from surge pricing
Let’s take a look at what it says here. I’m getting this off USA Today. This is from Uber’s press release. “The package is meant to protect riders against surge pricing, so customers can plan rides without any unwelcome surprises.” That’s in quotes. They’re saying now surge pricing is an unwelcome surprise.
Customers can save up to 15% per ride with the new plan it added. Here’s my thing about Uber’s kickoffs and how they announce things. They’re always so vague and so slippery. You can save up to 15%. What in the world does up to 15% mean? I suppose if you’re buying it, they might outline it a little more specifically, but that’s all it says. You may save up to 15%. Is that only on surge pricing or are there other things you can save on as well? Because they do go on to mention Uber X, Pool, and Super Pool.
Let’s continue to read this. The plan is available in five cities: Austin, Los Angeles, Denver, Orlando, and Miami. As I already said, it’s more expensive in LA. However, it says you can get additional benefits on e-bikes and scooters with the ride pass in LA at no additional charge. I don’t know what that means when it says additional benefits. I’m sure you’re not going to be able to get one of those e-bikes or scooters for free. They’re just so vague about everything. I would like to have them just say, “You save 15% across-the-board.” What would be so difficult about that? Whatever your ride is quoted, you only pay 85% of that ride.
Then the article goes on to talk about how they’re generating revenue, and said they made $2.8 billion in revenue last quarter, up 63% from last year. I’m not a financial guy, I’m not a big business guy, I’m not really understanding how you can increase your generated revenue by $2.8 billion and still continue to lose money. Probably by doing things like this. We’re going to keep cutting costs.
What happens to the driver? We’re going to get to that in a minute.
Then they reference that Lyft has done the same thing. Lyft actually beat them to the punch. Because we have been talking about this for several months now. We knew that the monthly pass was a thing that was going to be coming. We didn’t know what form it would take, and we still really don’t know what form it’s going to take.
What does the Lyft pass offer?
Now, with Lyft’s plan, they offer 30 rides for $299. So, basically $10 a ride. That seems like an incredible price if you do that many rides. Will you do a ride a day? Some of you do. If you live in metropolitan areas, you may take Uber to work and back every single day. That 30 rides for $299 is a great deal.
Back to Uber. It says that this pass is going to help save money on Uber X, Uber Pool, and Uber Express, known at this channel as Super Pool. So, what does that mean? A monthly fee of $14.99 for discounted rates for all Uber X, Uber Pool, and Super Pool rides in a given month. I don’t know. Do they give you that 15% off the top? Uber is just so slippery, and just like they do with our pay, they say, “Well, you’ll sign up and it’ll be a 20/80 split. It’ll be a 25/75% split.”
The benefits of the Uber pass are unclear
It’s not that anymore. Now the rider pays whatever the rider pays, based on who knows what, and the driver gets miles and minutes, which they’ve been manipulating as well. If the rider is paying less, let’s say 15%. I’m just guessing at this. I don’t know that that’s what they’re going to do because they’re not releasing that information. Maybe if you’re in one of those cities, you can look into that and see exactly how people are going to save 15%. I suspect Uber is not going to be that blatant and tell you. All they’re going to do is hint at it. Well, you know, if you avoid a surge right there, and that’ll be 15% for the month. There’s going to be that type of language? That slippery language.
However, if people are saving 15% per ride let’s just say to make the math easier here, what’s that going to do for us? How is that going to affect our bottom line? Is that why they’re manipulating some of these prices? Is that why they just bumped up the time a little bit and lower the miles, because they’re trying to compensate knowing that things like that are in the works? Or are they just counting on, yeah, you know, we don’t really care what happens on the ride end. Of we can sell this subscription and we can get a renewable $15 coming in every month automatically charged to someone’s credit card, so you’re talking about $180 a month even if they don’t take a ride, are they banking on that?
It’s just like the gyms. They know that people will hit it hard and heavy for the first month or two. After that, it’ll dwindle away to nothing, and people are still paying their fee, but they don’t go to the gym. Maybe it’ll be the same thing. People will get all excited and they’ll pay their $15 bucks. After the first couple of months, they’ll kind of forget about it, because it’s hidden. They don’t see it. They’re not having to take three $5 bills out of their wallet and put it on the counter. It’s just getting taken out, getting charged, either debited out of an account or charged to a credit card, so they’re not really going to see it.
Is that what Uber us banking on? I don’t know. But I’m really wondering. They can’t discount fees, just an arbitrary discount, and then not somehow compensate for that on the ride end. I don’t see how they can do it, unless they’re taking the McDonald’s approach. We’ll sell cheap hamburgers, but we’ll sell a lot more of them. Are they hoping that they’ll sell cheap rides, but sell a lot more of them?
What is your take on the Uber ride pass?
I’d love to hear what your thoughts are. I know a lot of this is supposition at this point. We don’t really know, but those of you who live in the cities of Austin, Los Angeles, Denver, Miami, or Orlando, you may know a little more. You may be hearing about some of this. You may be getting some of the press releases sent to your email that we don’t get if we’re not in those markets. Leave your comments down below, either what you know or what you think might happen. As always, you know I read your comments. I don’t always reply to them, but I do read them. I love it when you share and like the videos, and especially when you subscribe.
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