Should you ditch your car for a Lyft subscription?

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Should you ditch your car for a Lyft subscription?

Subscriptions are everywhere: They are how you get your daily news, TV shows, even your groceries. Now hailing a ride comes with a subscription.

In October, the ride-hailing company Lyft introduced its All-Access Pass, a monthly subscription of $299 for 30 rides worth up to $15. If a ride costs more than $15, you pay the difference. Further rides are discounted 5%.

After reviewing passenger feedback, we determined that the current pricing structure resonated most with passengers," said Katie Dill, vice president of design at Lyft. "Especially those looking for alternatives to personal car ownership."

The All-Access Pass is one of the first in the industry. Lyft hopes it will eventually replace owning a car altogether.

“It really speaks to the rise of the sharing economy,” David Liniado, vice president of New Growth and Development at Cox Automotive, said. “And there’s a larger percentage of people that, given the opportunity, would not choose to own a car and would want to subscribe.”

Does this mean you should ditch your car?

Short answer: Probably not.

Robert Sinclair Jr., a spokesman for AAA in New York and New Jersey, said while ride-hailing services are popular and convenient, it’s not a cost-effective replacement to owning a car.

“Yes, it’s more work to own a car, but you always have transportation on hand,” Sinclair said. “And it is significantly cheaper to own, even when you factor in things like parking.”

The average driver in an urban area pays on average $7,321 to own and operate a new vehicle, the costliest form of vehicle ownership, according to analysis from the AAA Foundation for Traffic Safety. In comparison, relying primarily on a ride-hailing service would cost you $20,118 on average annually.

The All-Access Pass can save you money over hailing individual rides to get to work. We calculated the cost of commuting via Lyft from Williamsburg, Brooklyn to our office in the Flatiron District in Manhattan. It cost just under $10,000 annually, which is still more than the cost of owning a car, according to the AAA analysis.

Sinclair said there are some instances where it makes financial sense not to own a car. When factoring in gas, auto insurance and parking, owning a car may be a more expensive option in urban areas like New York City.

Sinclair said it also may not make sense to use either a ride-hailing service or own a car when public transportation is an easier, cheaper choice.

“Depending on where you are, one may make more sense than the other, or a combination,” he said.

Using ride-hailing services over public transportation

Carla Caban, a New York City resident, said she takes often takes Lyft to work when she’s running behind. She said the convenience of the service makes the option more appealing than waiting for an often-delayed subway.

But shelling out almost $300 a month for the service seems steep, especially since it only covers 30 rides, or 15 days of commuting to and from work.

“It’s a good idea, but it sounds expensive for what it is,” she said. “You also have to pay that chunk of money upfront. It don’t think it’s worth the price, especially in New York.”

Caban plans to return to using only public transportation, purchasing New York's unlimited $121 monthly subway pass. Though it may be slightly less convenient than getting picked up outside her front door, she said the long-term savings are worth it.

Keeping car ownership costs down

Whether you live in a metropolitan area or not, there are ways to keep the cost of car ownership down. First, consider buying used, Julie Blackley, spokeswoman for ISeeCars.com, said.

If you already own a car, you can lower your monthly costs by keeping up with regular maintenance or even shopping around for a better auto insurance quote.

If you are a ride-hailing devotee and want to cut back on costs, consider these 7 tips to save you money on Uber and Lyft before you purchase the monthly pass.

Image: Drazen_