Alphabet’s Waymo is getting into the subscription — and Uber’s — business

Alphabet driverless ride-hailing subsidiary Waymo is getting into the subscription business with the launch of a product called Waymo Premier.

For $29.99 a month, invite-only “top riders” in San Francisco, Los Angeles, and Phoenix can get priority pickups, 10% Waymo Cash back on rides, early access to new cities, and five free cancellations per month.

According to Waymo, the program is a direct response to rider feedback, particularly daily commuters who rely on autonomous vehicles as a primary alternative to car ownership. The subscription is starting as a selective pilot but is slated to expand to more cities as Waymo’s footprint grows.

Waymo’s transition to recurring revenue closely mirrors a highly successful strategy pioneered by its ride-hailing frenemy Uber, which started Uber One back in 2021 and charges $9.99 per month for membership. It recently clocked 50 million Uber One members, who account for about 50% of the company’s overall gross bookings.

For platforms like these, subscriptions are the ultimate customer-retention mechanism. They create highly predictable, high-margin recurring revenue while simultaneously incentivizing members to spend more on the platform to maximize their membership value.

With Waymo currently pushing an aggressive expansion of its services across the country and preparing for a highly anticipated robotaxi showdown across the pond in London, establishing user lock-in has never been more critical.