As any regular Uber passenger in New York City can tell you, the cost of using the service can quickly add up, especially when factoring in the dreaded “surge” — the company’s practice of hiking rates based on demand at particular times and places.
Now Uber is rolling out a new pricing option, one that closely resembles the subscription model of Netflix or Amazon Prime. Starting October 1, Uber users can get unlimited UberPOOL rides — those shared with other passengers — in Manhattan south of 125th Street.The cost is $200 for the full month and $100 for the first two weeks of the month.
The move is the latest example of Uber tinkering with its pricing structure in an effort to attract more steady customers. The company has introduced as a pilot program flat-rate pricing in six U.S. cities: Seattle, San Diego, Miami, Boston, Washington D.C., and San Francisco, its headquarters.
The program, called Uber Plus, allows a limited number of Uber users, to pre-purchase a block of rides. The rates vary depending on the city; in San Francisco one can get 20 UberPOOL trips for $20; in Boston one buy 20 trips for $40. The cost of solo UberX trips is a bit higher, in the cities where that option is available as part of the flat-fare rides.
Uber says its drivers will be paid the same mileage- and time-based rate they get for a standard ride. It appears the company is calculating that the amount it will have to pay to subsidize drivers under the flat-rate and subscription models will be more than offset by a boost in riders drawn by the prospect of big savings.
It remains to be seen whether Uber will extend such offers nationwide or in the many other countries where it operates. Uber has shown itself willing to use its many markets as testing grounds as it continually tweaks its business model.
The latest move comes after similar experiments with flat-rate pricing were rolled out earlier this year in downtown Toronto and Manhattan.
Uber itself has acknowledged that surge pricing is problematic. As a National Public Radio story recently noted:
“While drivers see surge as a key feature of the job — and Uber advertises it as such to them — inside the company surge pricing is considered a market failure, a problem to be solved.”