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How To Get The Most Economic Benefits From Rideshare Services


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June 15, 2022

All it takes is the simple tap of an app on your smartphone, tablet, or other handheld device that's connected to the Internet. Like magic, ride-sharing users can take part in the convenience and comfort of a driving service that is far superior to flagging down a cab from both a convenience standpoint and user experience perspective. Although this cutting edge concept has only been in existence for the better part of ten years, it certainly has changed the world for the better. That is unless you own or operate a cab. The plethora of benefits of utilizing ride-sharing apps have helped the incredible expansion of this newfound industry.

In fact, the largest shareholder of the ride-sharing market in the United States, Uber, provides well over 14 million rides per day. That number is projected to grow well into the future as more consumers accept rid-sharing as a viable mode of transportation. In addition, Uber is constantly looking for the next greatest thing in ride-sharing in order to further increase their rapidly growing customer base. It almost goes without saying that ride-sharing platforms such as Uber and Lyft are providing people with a significant amount of benefits by offering a cheaper, faster and better method of transportation. However, there are a few economic based benefits that you may not be thinking about.

The following information will show you how to get the most economic benefit from rideshare services.

Avoid The Surge

It's important to actually look at the price of the fare before you agree to it. This is especially important for people who are from out of town. In essence, the practice of surge pricing, or charging more if demand is higher, makes some rides a lot less affordable. Surge pricing typically happens more to visitors of a city because they are more at the mercy of the ride sharing companies. In essence, travelers may not be aware or familiar with other transportation based options. The interesting thing is that both Uber and Lyft tweak their surge pricing on a constant and consistent basis, but how they are calculated is incredibly difficult to determine. That's because Uber and Lyft don't reveal exactly how the algorithm works.

The good news is that there are ways that you can save money by avoiding surge pricing. For example, if you're with a large crowd of people after a sporting event you should consider walking away from the crowd in order to save money on the rideshare fee. In essence, if you set your pickup location a few blocks away from the crowd, it may put you out of the surge pricing range and the fee could very well be lower. You can also wait out the cost of your ride. If you get something to eat and or drink before requesting a ride, the time spent doing something else can help you avoid surge time.

The bottom line is that by the time you request pickup the prices could very well go down. If you're seriously motivated, you may want to sign up to drive with Uber or Lyft in order to study the surge patterns. It may sound a bit extreme, but learning more about the surge will definitely pay off in fare savings for those of you who utilize rideshare on a regular basis.

Avoid Booking A Ride From The Airport

Did you know that rides from the airport are on the same level as surge pricing. Actually, an airport pickup can cost up to twice as much as it would from the airport hotel across the street. You're much better off taking a free airport shuttle to the closest hotel and having your Uber or Lyft driver pick you up from there. Your ride will be significantly less expensive, sometimes as much as 25 to 50 percent less. You will also save the driver from having to navigate the busy airport pickup. That's a useful tip even if the price is the same. For example, you won't waste your valuable time searching for your Uber or Lyft ride at the airport.

Upgrade To Value Added Services

Another way to get the most economic benefits from rideshare services is to upgrade to value added services. For example, Uber launched a service called Uber Comfort in 2019. The add-on ensures that you get a roomier car for a small upcharge. In addition, you also get a top-rated driver. The upper tier options such as Uber Black and Uber Select generally aren't worth it to consumers who don't really care about the make and model of the car that takes them there. However, it's always nice to have more space. It's just like flying in economy plus. You can also try a ridesharing subscription plan.

Many people are already familiar and comfortable with subscription plans, and Lyft in particular is capitalizing on that by adding subscription plans to rideshare services. In fact, Lyft is expanding its monthly subscription plans nationwide. Although many riders are being waitlisted right now, some Lyft users in major cities will see an option to join the waitlist whenever they open the app. Riders who are interested in joining pay $200 upfront and $15 off of the next 30 rides. In addition, any ride that costs $15 or less is free.

You simply pay the difference for rides that cost over $15. Uber offers something similar to Lyft's All-Access Plan, but on a significantly smaller scale. Your Uber Ride Pass unlocks benefits such as discounts on eligible rides through payment of a one-time activation fee. According to Uber, ride passes are still in test mode and are only available for a limited number of rides per month.

Share Your Ride With Another Rider

Both Uber and Lyft allow you to share your ride with another passenger, which can make your fare a lot less expensive. In addition, you can save a few dollars or more on your ride if you're willing to take UberPOOL or Lyft Line. In essence, with either UberPOOL or Lyft Line, you request a ride and then are partnered with a driver and another passenger or two (2) who are going in the same direction that you are. By taking POOL/Line, you'll save money because you are sharing your ride. However, your fellow passenger(s) may be dropped off before or after your stop. You don't have any control over that.

So, if you're in a hurry, or running late for something important then POOL/Line might not be your best choice. On the other hand, if you're willing to share a ride and add on potential time to the journey, it's a good option that will save you some money. You could save even more money by using Uber's Express POOL if it's offered in your area or an area that you're traveling to. Express POOL is similar to UberPOOL in the fact that you share your ride with other passengers and share the cost of your trip.

However, with Express POOL, you will be directed to a specific Express spot for pick-up. When you're dropped off, you will be dropped off in another Express spot. That means you won't be directly dropped off at your ultimate destination. However, if your destination is located within walking distance of the Express spot, it's yet another option that will save you money on your rideshare costs.

Make Sure To Sign Up For A Loyalty Program

Did you know that Uber Rewards provides frequent users with upgraded rides, highly rated drivers, and even priority pickup at the airport? Lyft offers Lyft Pink, which is a $9.99 per month program that provides benefits and rewards. In essence, when you're higher up in the rideshare program, you get the better drivers and better cars. The loyalty programs are both generous and flexible, which is something that you don't usually encounter with other loyalty programs like the ones offered by the major airlines. If you use Uber for your job, set up an Uber for Business account in order to further minimize rideshare expenses when your rides are work-related.

What this basically does is give you double the number of points toward the next reward tier. In essence, you'll spend less to get a higher loyalty status on Uber. If you are an American Express Platinum card member, you get up to $200 in Uber Cash on an annual basis. That equals $15 per month plus a $20 bonus in December. You can use this benefit on either rides or Uber Eats. Please note that this American Express benefit is only available in the United States. In addition, if you have an American Express Gold card, you will receive up to $120 in Uber Cash on an annual basis.

That equals $10 per month. You can also use this benefit on rides or Uber Eats. This American Express benefit is also only available in the United States. Platinum Card Members also receive automatic Uber VIP access. This exclusive benefit unlocks perks, discounts, and giveaways. Uber Cash and Uber VIP status is also available to Basic Card Members and Additional Centurion Cards only.

In conclusion, utilizing one or more of the strategies listed above will help you save money on your future rides with both Uber or Lyft. It's important to download both apps, compare prices, share your ride, and avoid surge pricing. By being fully aware of upcharges, discounts, and benefits, you can take full advantage of everything that ridesharing has to offer. You'll also be able to keep more of your hard-earned money in your pocket where it belongs.


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About the author

Mark Scribner

Mark Scribner

Managing Director, Boston

Mark F. Scribner is the Managing Director of oXYGen Financial, Boston Office. Mark grew up in Melrose, MA and now lives in Boston. He has an amazing wife Michelle, who supports all of his crazy endurance endeavors, including a solo attempt to swim the English Channel! Mark is the father of four children - Mark, Bella, Olivia and Emma. He loves being an assistant NFL photographer and cancer fundraiser, along with creating and running various companies.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. Investor Disclosures: https://bit.ly/KF-Disclosures

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. https://Bit.ly/KF-Disclosures

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