Editor's note: Our Post Seed VC event is coming up on Dec. 1 in San Francisco. We'll have Chamath Palihapitiya (Founder of Social Capital), Aydin Senkut (Felicis), Jeff Lawson (Founder & CEO, Twilio) and more. Check out the full lineup and register for tickets before they jump! Post Seed is brought to you by Vator, Bullpen Capital, and Haystack.
First, they gutted the taxi industry. Might the next victim of ridesharing companies be buses, trains, and other forms of public transportation?
Lyft yesterday announced that it will be selling Lyft Line Passes for the month of November, allowing customers to essentially purchase a monthly membership for discounted rides. There are two kinds of passes available:
- Pass 1, which costs $20 up front, reduces the cost of every Line ride to just $2.
- Pass 2, which costs $29 up front, eliminates the cost of Line rides. So customers who choose this option simply pay the initial fee and can then take as many Line rides they want throughout the month for no additional cost.
Both Lyft and Uber have suggested that these membership options would be coming, but neither has officially committed to a permanent plan. Over the summer, Uber offered a $79 Commute Card through Gilt City, granting customers unlimited rides Monday through Friday during rush hour.
What strikes me as most notable about Lyft’s passes is the low cost. For example, both are less than half the cost of Uber’s Commute Card. And both seem to be a better deal than simply taking individual Lyft Lines.
The cost of Lyft Line and uberPOOL vary greatly depending on the distance of the trip, time of day, existing traffic conditions, number of available drivers, and various other factors. But, in my experience in San Francisco, the cost usually falls somewhere between $5 and $15 per trip. So, for me, the second pass option would clearly pay for itself after just a few rides.
I don’t regularly commute to an office, but this got me thinking about another monthly pass I used to pay for: the monthly pass for Muni and BART in San Francisco. As of today, a regular adult pays $73 per month for an unlimited Muni pass and $86 per month for the unlimited pass that includes Muni plus BART (within the city). That second pass is actually going to be $91 per month starting this January, which would make it more than three times as expensive as Lyft Line’s Pass 2.
Who in their right mind would pay a 3X premium to ride Muni and BART over Lyft Line?
To be fair, Lyft specifically says it’s “testing out different types of membership passes,” so these early pass charges may just be priced low to draw in customers. I’d almost certainly expect the actual membership costs to be higher once this is an established service—but not three times higher.
Also, it’s worth noting that the Lyft Line passes are not yet available in San Francisco. For the month of November, the company is testing the passes at these price points in Los Angeles, Miami, San Diego, Chicago, Atlanta, and Washington, D.C.
But monthly passes for public transportation are more expensive in all the cities where Lyft is launching its Line passes:
- Atlanta: The 30-day MARTA pass costs $95.
- Chicago: The CTA/Pace 30-day pass costs $100.
- Los Angeles: The regular EZ transit pass starts at a base price of $110 per month.
- Miami: The one-month pass costs $112.50 (or $123.75 with parking) per month.
- San Diego: The monthly pass starts at $72 per month.
- Washington, D.C: Depends, but the cheapest option for rail-only starts at $81 per month.
Of course, this conversation isn’t just about pure dollars and cents, though that will be the most important factor to regular commuters. For cities and the diverse communities that live in them, however, there are serious questions around what it would mean for Uber and/or Lyft to poach riders from public transportation systems.
The San Francisco Municipal Transportation Agency (SFMTA) and equivalent agencies are tasked with managing transportation in their respective cities with the implicit understanding that, as government groups, they are supposed to put the interests of residents and visitors interests first. That’s not necessarily the case with private businesses and investors or even public companies beholden to shareholders.
I will admit: Your average SF resident (especially if they’re around my age) likely said good riddance to the problem-plagued taxi industry, and would probably say that Lyft and Uber made a positive impact by delivering new competition and innovation. But the fact remains that they are private, for-profit entities, so we would do well to pause and think twice about the potential consequences before applauding the death of public buses and trains.