Lyft All-Access and $299 subscription a Big Rip-off?

About two weeks ago, the popular ride-hailing app Lyft unveiled its new All-Access plan which enables anyone in the US to buy a subscription to the ride-hailing service.

At a fee of $299 per month, you will receive up to 30 rides – with the caveat that all the 30 rides must remain under $15 each, otherwise Lyft will charge you the difference.

The question is: do the numbers add up for the average user?

How It Works

The All-Access Plan is a prepaid subscription Lyft customers will renew every 30 days.

A passenger who has paid for the $299 subscription is entitled to a total of 30 rides, so long as each ride is under $15. If a particular ride costs more, Lyft will charge you the difference. For instance, you will pay $5 for a $20 ride.

If a ride is under $15, that counts as one out of the 30 rides available to you. For instance, if you have a $10 ride, the extra $5 won’t be pushed forward. Regardless of how low your ride costs, it will be counted as one of your 30 available rides.

As a bonus benefit, subscribers are entitled to a 5% discount for any additional rides.

The service is available to everyone in the US.

Lyft projects that people who use the All-Access plan stand to save as much as 59% monthly (figure varying according to city and personal expenses) compared to the monthly costs they would incur if they owned a car.

Is It Worth It?

lyft app

Some have called it a “rip-off”. However, once we do the numbers, they actually add up, just not for everyone.

This new subscription service has a niche target. It’s not for the casual Lyft passenger, the once in a while rider.

The target rider is preferably someone who uses Lyft as an alternative to having a personal car, someone who commutes daily – in other words a heavy user of the Lyft service.

For such an individual, the All-Access plan may actually be a bargain. Consider that $15 for 30 rides is actually $450. If the subscription plan costs $299, that saves the person $150 – but only if his rides cost exactly $15 each.

If this person’s rides cost $10 each, it means that without subscribing to the All-Access plans, he would pay $300 for 30 rides. That is equal to the $299 charged for the subscription.

That means that for this service to save money for a subscriber, he/she has to be the kind of person whose rides per month cost over $300.

If your rides per month cost less than $300, paying for this subscription will be counterintuitive – you will spend more money rather than save.

If you spend over $300 per month on rides, you will save at most $150 plus the 5% discount you get for any additional rides.

By formalizing this subscription service, which it started testing in March, Lyft has officially joined companies like Hulu and Amazon that have added subscriptions to their businesses. Subscription services lock in customers for the long haul, and are a more predictable business model.

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