Uber Technologies Inc., the surging rideshare company based in Silicon Valley, is widely expected to make its initial public offering during the first half of next year. Wall Street experts anticipate the IPO will launch during the first quarter of 2019. Just under one month ago, Uber teased a $120 billion company valuation.
This massive figure is intriguing on several fronts. For starters, it trumps that of automakers Ford Motors, General Motors, and Fiat Chrysler — combined. Moreover, the valuation comes at a time when Uber’s growth is spiking, despite ongoing controversy surrounding troublesome business tactics and company ethics.
But given the weight a potential valuation of this magnitude holds, Uber remains the IPO darling of 2019. A compounding fact that heightens excitement for the looming IPO is the companies head-first dive into the thriving membership-based industry with Ride Pass.
Launching in five cities — Austin, Los Angeles, Denver, Orlando, and Miami — Uber Ride Pass is a membership-focused service that provides members with discounted pricing. A monthly service fee of $14.99 provides customers discounted rides and complete safety from “surge” prices. The discounted rides are available for all UberX, Uber Pool, and Uber Express Pool rides in any given month.
Generally speaking, Uber customers who enter into this membership plan will receive a 15% discount per ride. In Los Angeles, the plan cost $24.99 monthly but includes discounted services on e-scooters and bikes, respectively.
Uber’s Ride Pass comes after Lyft offered a similar plan to its customers. Announced back in September, Uber’s largest competitor offered its client-base a more costly plan that covered each ride in its entirety (up to a limited number of rides). Holistically, each move marks not only a shift in industry thinking but a general leap towards membership-based servicing that dental membership plans helped forecast.
Uber’s strategical rollout of Ride Pass near the close of 2018 lends to their need to secure clients for year-end evaluation. They’ll need a formidable financial stamp on the backend of this year to stabilize an astronomical valuation that will ultimately set the course its forthcoming IPO. Securing members and their subsequent financial commitments through Ride Pass is one avenue towards that lofty goal.
This revolving industry trend will continue to expand, and far beyond just the competitive rideshare market. With its direct correlation to customer retention and affordability, more businesses will make the leap to membership-based services in 2019 and beyond.