Uber Technologies (NYSE:UBER) has announced the launch of a new shuttle service in the U.S., alongside an expanded collaboration with Costco Wholesale Corporation (NASDAQ:COST). These initiatives, revealed at Uber’s annual GO-GET event, aim to capture the attention of cost-conscious consumers and stimulate growth amid fierce competition from Lyft.
The San Francisco-based ride-sharing and delivery giant reported its first annual profit in 2023 and is introducing the Uber Shuttle service to bolster its market presence. This new service allows users to pre-book up to five seats on buses operating in busy areas such as airports, concerts, and sports venues. Uber will collaborate with local fleet operators, using vehicles that can accommodate between 14 and 55 passengers.
Additionally, Uber has introduced the option for users to schedule shared rides and has rolled out a student discount for its Uber One membership. In the realm of food delivery, Uber is enhancing its partnership with Costco, offering U.S. Costco members who order through Uber Eats additional discounts and a 20% reduction on the annual Uber One plan.
While Lyft does not offer a shuttle service comparable to Uber’s, it does provide a Transit mode in its app, which allows users to view the schedules of nearby shuttles, trains, and ferries. Recently, Lyft has ramped up its competitive strategies against Uber by eliminating surge pricing, in response to a resurgence in demand for ride-sharing services as employees return to work and engage in holiday travel.
Market analysts, including those from research firm YipitData, note that the fares for UberX and Lyft Standard rides have remained stable over the last two years, suggesting that the North American ride-sharing market could be approaching saturation. This landscape is prompting both Uber and Lyft to explore new growth strategies such as advertising and enhanced subscription services.
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