Uber is piloting a new subscription that bundles its ride-sharing, meal delivery, scooter and bike offerings — creating a hub to encourage passengers to use all of its consumer services.
The monthly membership is being tested in San Francisco and Chicago and costs $25 per month, Tech Crunch first reported. An Uber Technologies Inc. spokesperson confirmed the company is in the early stages of testing the new kind of pass.
Perks of the pass include price protection and fixed discounts on every ride, free Uber Eats deliveries as well as free Jump electric bicycle and scooter rides.
A variety of lower-priced passes — that include different levels of ride and meal-delivery discounts — are being tested in a handful of other cities, according to Uber.
“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,” an Uber spokesperson told CBS MoneyWatch.
Uber in May reported its first earnings as a public company, losing $1 billion on $3.1 billion in revenue during the first three months of 2019. By some measures the company was losing 58 cents on every ride earlier this year.
Analysts remain skeptical of the ride-hailing pioneer’s ability to ever turn a profit — despite its $75 billion valuation when it went public at $45 a share in May. Uber’s stock price was around $43.25 on Tuesday.
Uber CEO Dara Khosrowshahi has stated that the company’s strategy “is to grow fast, at scale and more efficiently for a long, long time.”
This move appears to be in line with that tack.
“This is Uber trying to further monetize their installed base and increase the stickiness of their platform,” said Wedbush Securities analyst Daniel Ives. “It’s a smart move given that more consumers are looking for subscription-oriented types of programs to stay within one ecosystem or another.”
Uber already has a Rider Pass — but it doesn’t include food delivery. Competitor Lyft has a similar offering called an “All-Access Plan” — a subscription that gives passengers a set number of rides per month.
Ives said Uber’s new offering helps set it apart from the competition. “This is something Uber needs to focus on because they need to keep consumers in their backyard so they don’t go to the competition.”
Uber acknowledged in an SEC filing before its IPO that its path to profitability could be bumpy. “Many of our efforts to generate revenue are new and unproven, and any failure to adequately increase revenue or contain the related costs could prevent us from attaining or increasing profitability,” the company said.
This new subscription model could help nudge the company in the right direction. “Over the long-term, this could maybe move the needle toward getting there quicker, but now it’s about growth and increasing their installed base,” Ives said.