In an ecosystem where survival is for the fittest, Lyft is continuing to challenge Uber will new business models that could upset the current equilibrium. Lyft is not interested in equilibrium, it is interested in market dominance, just as Uber is too.
Now Lyft has come up with a new pricing model, which they hope will shake up the market and bring them an immediate advantage. Lyft is introducing monthly subscriptions. This new payment plan includes pricing such as $249 for all access, $199 a month for 30 rides, $300 or $399 a month for 60 rides and more.
The model includes rides that reach up to $15, and Lyft is targeting the $450 a month rate, but we don't know how many rides this will cover as yet.
The invitations went out through Twitter, and according to Lyft, an official statement was sent out saying "We're always testing new ways to provide passengers the most affordable and flexible transportation options. For the past few months, we've been testing a variety of all-access plans for Lyft passengers."
Logan Green, Lyft's CEO stated that "In the future, we won't own transportation, we'll subscribe to it. We've seen industries make this shift in the past from an ownership model to a service model — we've seen it with companies like Netflix and Spotify — but at over $2 trillion, transportation will be the largest industry to flip, and the implications will be world changing."
My take; I am sure that Lyft's financial experts have estimated the profitability of this new model, and they are making a small profit from it. The concept of subscriptions is not new, far from it, subscriptions is a standard method for assuring a constant flow of cash. It is a very useful tool for estimating the basic cash flow, where a monthly increment of money comes in, and income is predicted by the number of subscribers and not rides. Subscriptions can also be a precursor to AV ridesharing, where pricing can be more accurately controlled, and there are no issues with drivers.