Lyft has launched a monthly subscription service nationwide Wednesday that touts better airport access, surprise offers and a 15% discount on all rides.
The Lyft Pink initiative will cost users $19.99 a month.
Both Uber and Lyft have introduced monthly subscription services in the past year and a half.
Uber did not respond to questions about their services. But in July, TechCrunch reported that Uber launched a test subscription in Chicago and San Francisco. As of Tuesday, the service was not available on the Uber app, but the program reportedly gave users discounted rides and free deliveries on UBEReats for $24.99 a month.
Lyft had previously tried a $299 annual program that granted 30 rides, but that was later shelved.
“I don’t think that did too well cause it was too steep to make a difference,” said Professor Hani Mahmassani, the director of the Northwestern University Transportation Center.
The idea behind monthly subscription services is to secure “stickiness” — to ensure that Lyft riders remain solely Lyft riders. Membership programs create more loyal, frequent and passionate customers, Mahmassani said.
Stickiness is hard to maintain in the ride-sharing business, where consumers often have multiple apps and make their decision based on convenience and price rather than brand loyalty. Monthly membership programs are one way to combat that, Mahmassani said.
“With the subscription service, those who are already regular users will become even more regular,” Mahmassani said. “Even more loyal. They will use the app more often.”
Optimizing monthly subscriptions is one of the ways the ride-hailing companies are trying to gain dominance in the market.
“It’s a never-ending competition between Uber and Lyft,” said Harry Campbell, founder of TheRideShareGuy.com. “Instead of competing on a per-trip basis, the companies are now competing on a monthly basis.”