Uber Technologies Inc. is launching cheaper merger ride options and price lock-in for commuters, highlighting its focus on attracting more everyday users as consumers face rising costs.
The San Francisco-based ride-sharing company announced a “route share” Wednesday, a budget-centric product that is 50% cheaper than the regular Uberx and is available only during weekday commute hours.
By comparison, its existing consolidated ride options cut costs by just 20%. But there is a trap: “Along busy corridors” similar to the bus, where the shared pickup truck runs every 20 minutes every 20 minutes, and passengers may have to walk to the 15-minute pickup point and share a car with two other people.
Uber said it launched Wednesday in New York, San Francisco, Chicago, Philadelphia, Dallas, Boston and Baltimore, and launched in future cities. The company hopes to work with employers to qualify for pre-tax commuter benefits. Unlike shuttle bus services between the airport and the city center, route-sharing rides will be in conventional cars driven by independent contractors rather than shuttle operators.
Additionally, Uber said it would launch a pass for passengers to lock in fares on up to 10 different routes, confirming early Bloomberg news reports. It will start in 10 U.S. cities, including San Francisco, Washington and Miami, and then gradually expand to other U.S. markets as well as Brazil.
Uber said in the summer, if users pay for travel prepayment on fixed routes from 5 to 20, deeper discounts will be offered. For example, a prepaid pass for five rides on a fixed route will offer a 5% discount, and a 20% discount for 20 advances.
Uber has been competing with smaller rival Lyft Inc. to offer different flavors of its ride-hailing products to win customers with a variety of needs and budgets. According to both companies, commuters have become key customers of their services. Commuters on Uber account for about 3 billion trips worldwide, or 30% of all rides and delivery trips in 2024.
Meanwhile, investors have been paying attention to how consumer sentiment affects U.S. ride-hailing business in the U.S. after the company said travel spending slowed.
A Gridwise survey in February showed that if prices in the U.S. and Lyft rose 7.2% in 2024, most customers would curb or cut rides.
Lyft stopped its merged rides in 2023, but its monthly price-lock pass has been popular among commuters since its launch in August last year. Price-locked subscriptions in the first quarter rose 21% in the first quarter, the company said in a report of quarterly earnings last week.
Chief Product Officer Sachin Kansal said in an interview that for Uber, the more complex aggregated ride scenarios designed for commuters will one day “make sense” for self-driving car-sharing travel. He said Uber plans to introduce the merged rides on Volkswagen’s driverless ID Buzz Electric Vans when it plans to offer the service commercially in the City of Los Angeles in 2026.
Also on Wednesday, Uber announced a new “meal” restaurant reservation feature, which was owned by Booking Holdings Inc.’s Opentent opentent as part of an earlier announced partnership. Uber One members will prioritize bookings in certain markets, while Opentable customers can get discounts on Uber rides for a limited time.
Competition in the space will also grow with plans from food delivery rival Doordash Inc., which plans to add similar features through its pending acquisition of hotel technology company Sevenrooms Inc.
Bloomberg's lung report.
