Uber tests monthly subscription model in the US
Priya Wadhwa
10x Industry

Uber tests monthly subscription model in the US

Testing is underway in San Francisco and Chicago

In the face of Ola and Didi Chuxing’s SoftBank backed international expansion, Uber is facing the pressure to innovate or lose its market share. The company is now experimenting with its subscription-based model in San Francisco and Chicago to see how it can best leverage its assets to strengthen its position with a monthly recurring revenue stream.

Uber’s subscription model is not new. It introduced Ride Pass in 2018, which is now available in over 24 cities in the US. In some cities, it costs $14.99, while in others with JUMP e-bikes and scooters, such as Los Angeles, it goes for $24.99.

The subscription allows for discounted cab rides, price protection against surge rates, 30 minutes free riding on the e-bikes and scooters, and more depending upon the model introduced in the market.

The new model currently being tested adds Uber Eats to the subscription, allowing free deliveries over a certain order amount.

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.
Uber told TechCrunch in a statement

When Uber went public earlier this year, it reported a loss of $1 billion on a $3.1 billion revenue. In spite of this, it continues to expand its reach and acquire startups like Careem for the same amount that it made in revenues in the entire year of 2018.

Many remain sceptical of Uber’s ability to turn a profit given that Didi Chuxing and Ola are giving it intense competition by setting up their labs in the US, to research further into driverless cars, as well as expanding to where uber is present.

"This is Uber trying to further monetize their installed base and increase the stickiness of their platform. It's a smart move given that more consumers are looking for subscription-oriented types of programs to stay within one ecosystem or another."
Daniel Ives, Wedbush Securities analyst, said to CBS News

Uber is not just a ride hailing company anymore. It has long since expanded to include multiple modes of transportation as well as food delivery. It says its strategy is “to grow fast, at scale and more efficiently for a long, long time."

However, given the growing competition from SoftBank backed ride-hailing startups from Asia, Uber seems to be cornered into facing losses while putting up strong competition, so as to win in the long run, even if it has to be through a big exit via a merger.