Lucid cuts annual production forecast as global trade tensions sting
Shares of the company dropped over 10% in extended trading.
Despite seeing a rise in deliveries for its luxury electric vehicles, Lucid is navigating an uncertain time for the industry as U.S. import tariffs threaten to upend supply chains and raise the costs of vehicles by thousands of dollars.
The company has been aggressively striking deals with North American companies in order to domestically source critical minerals used in EV manufacturing amid a push by the Trump administration to reshore production and strengthen American manufacturing.
Lucid's fortunes rely heavily on the success of its newly launched Gravity SUV and the upcoming mid-size car, which targets a $50,000 price point, as the company looks to expand its consumer base.
Competition in the U.S. EV market is also stiff, with industry giant Tesla pushing sales of its revamped Model Y, and Rivian marketing its refreshed versions of the R1T truck and R1S SUV.
Lucid now expects to make between 18,000 and 20,000 vehicles this year, compared to its previous forecast of 20,000 vehicles.
In order to diversify revenue streams, Lucid signed a deal with Uber last month, whereby over six years, starting in 2026, the ride-hailing platform will acquire and deploy over 20,000 Lucid Gravity SUVs that will be equipped with autonomous vehicle technology from startup Nuro.
As part of the deal, Uber will invest $300 million in Lucid as the firms look to establish a foothold in the robotaxi market.
Lucid reported revenue of $259.4 million in the second quarter, missing estimates of $279.9 million, according to data compiled by LSEG.
On an adjusted basis, the company lost 24 cents per share, compared with estimates of a loss of 21 cents per share.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
15 minutes ago
- Yahoo
United Airlines flights resume after it resolves technology glitch
STORY: :: Nikki Chapman United Airlines flights at U.S. airports were briefly grounded on Wednesday. :: Alan Billman The company says it has now fixed the tech issue that caused it. In a statement, United said: 'We've resolved technology issues that had been affecting flights. While we're still experiencing delays, our team is working to restore our normal operations.' The issue came weeks after Alaska Airlines grounded flights for three hours in its second IT outage in just over a year. According to the U.S. Federal Aviation Administration, the hours-long outage caused ground stops at major United hub airports, including Newark, Denver, Houston, and Chicago. Flight tracking data service, FlightAware showed 34% of United flights had been delayed by the incident as of late Wednesday evening on the US East Coast. United said the issue was with its Unimatic system, which feeds flight data to systems for weight, balance, and tracking. It also said it would cover customer expenses, like hotels, for delays caused by the tech issue. U.S. Transportation Secretary Sean Duffy said in a post on X that the issue was limited to United and unrelated to air traffic control. Solve the daily Crossword
Yahoo
15 minutes ago
- Yahoo
Trump tariffs live updates: Trump boasts of tariff billions, vows to punish China on for Russian oil
President Trump took to Truth Social on Thursday boasting that billions of dollars in tariffs were now flowing into the US. "IT'S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!" Trump wrote. The US president added that this additional money will come "largely from countries" that he says has taken "advantage" of the US. "RECIPROCAL TARIFFS TAKE EFFECT AT MIDNIGHT TONIGHT! BILLIONS OF DOLLARS, LARGELY FROM COUNTRIES THAT HAVE TAKEN ADVANTAGE OF THE UNITED STATES FOR MANY YEARS, LAUGHING ALL THE WAY, WILL START FLOWING INTO THE USA." Trump's sweeping "reciprocal" tariffs hit US trade partners on Thursday when his deadline to strike deals expired at 12:01 a.m ET. As the trade deadline loomed Wednesday, Trump signed an executive order imposing an additional 25% tariff on India over its purchases of Russian oil. The new tariff, which will come into effect in 21 days, is set to "stack" on top of an existing country-specific tariff of 25%, which takes effect today. In doing so, Trump is set to make good on a threat for higher tariffs on India, as he has accused the country of effectively financing the Russian war in Ukraine. "They're fueling the war machine," he charged in a CNBC interview. Trump also floated the idea of higher tariffs on China due to Beijing's purchase of Russian oil. Trump said he would punish China with additional tariffs. Outside of China and India, Switzerland is the developed nation whose goods face a whopping increase: up to 39%. You can see the new rates Trump is set to levy in the graphic below: Trump also said that he would soon announce tariffs on semiconductor and pharmaceutical imports, as he prepares to add more sectoral duties to his mix of tariffs. He said duties on pharma could eventually balloon as high as 250%. On Wednesday, during a White House event with Apple (AAPL) CEO Tim Cook, he suggested he would impose a tariff of 100% on "all chips and semiconductors coming into the United States." In the past several days, Trump has unleashed a flurry of deals and trade moves leading up to his self-imposed deadline: Trump granted Mexico, the US's largest trading partner, a 90-day reprieve on higher tariffs. Trump hiked tariffs on Canadian imports to 35%, though goods contained in the US-Mexico-Canada agreement are exempt, keeping this hike's impact limited so far. The US agreed to a trade deal with South Korea. The agreement includes a 15% tariff rate on imports from the country, while the US will not be charged a tariff on its exports. Trump imposed 50% tariffs on semi-finished copper products starting Aug. 1. The president signed an order to end the de minimis exemption on low-value imports under $800, thereby applying tariffs from Aug. 29. Trump signed another order to impose a total of 50% tariffs on many goods from Brazil. However, it exempts key US imports like orange juice and aircraft parts. The US and EU agreed to a trade deal that imposes 15% tariffs on EU goods. The nations are still working on finalizing many terms of the deal. Read more: What Trump's tariffs mean for the economy and your wallet Here are the latest updates as the policy reverberates around the world. Trump says he plans to set tariffs on computer chips at 100% President Trump said on Wednesday at a press conference with Apple CEO Tim Cook that he is planning to set a 100% tariff on semiconductor imports. Companies that pledge to invest in manufacturing in the US, however, will be exempt from the tariff. Reuters reports: Read more here. Apple set to dodge bulk of India tariffs Yahoo Finance's Dan Howley reports: Apple CEO Tim Cook has arrived at the White House. He is scheduled to speak with President Trump this afternoon and unveil an additional $100 billion investment in US manufacturing, on top of the $500 billion commitment already pledged by the company. Modi's rival blasts 'bully' Trump as public opinion hardens Rahul Gandhi, Narendra Modi's most recognizable political rival, has come out to call President Trump a "bully" for his negotiation tactics. Bloomberg reports: Read more here. Trump order lowering tariffs on EU autos still days away: source European automakers will have to hold on a little while longer before President Trump lowers auto tariffs as EU-US negotiations continue. Reuters reports: Read more here. Alcohol groups say tariffs put $2B in sales and 25,000 jobs at risk In a letter to President Trump, a group comprising of 57 alcohol industry firms have said that Trump's tariffs of 15% on EU goods could reduce the value of alcohol sales by almost $2B and put 25,000 jobs at risk. Reuters reports: Read more here. Trump hits India with additional 25% tariff over Russia oil buys President Trump has hit India with an additional 25% tariff due to India's purchase of Russian oil. The US president threatened India with higher tariffs earlier this week, which India's Prime Minister Narendra Modi called "unjustified," also calling out the US for its double standard over Russia. In an interview with CNBC on Tuesday, Trump said that India was helping to fuel the war machine. 'They're fueling the war machine. And if they're going to do that, then I'm not going to be happy,' Trump said. In the early days of trade negotiations, relations between the US and India appeared more friendly, with both sides saying they would reach a deal within days. However, over recent months ,things seem to have turned sour as neither side can agree on some of the finer details within the deal, which concern dairy and agricultural products. As a result, a trade war seems to have developed between the two sides, and now with this additional 25% tariff gift from Trump to Modi, the two seem further away from reaching an agreement than ever before. Carney says he'll look at opportunities to remove tariffs on US Canadian Prime Minister Mark Carney said that he will look to assess ways in which he can remove some counter-tariffs against the US. Carney's statement seems at odds with his earlier commitments to fight back against President Trump's trade war. Bloomberg News reports: Read more here. Trump says Japan to import Ford's huge F-150 pickup trucks President Trump said that Japan has agreed to accept imports of Ford's F-150 pick up trucks. This latest news is seen as a sign that the two sides may not be on the same page when it comes to their understanding of the trade agreement reached last month. Bloomberg News reports: Read more here. US investments under trade deal will be determined by benefits for Tokyo: Japan Reuters reports: Read more here. Honda Q1 operating profit halves on tariffs Shares in Honda Motor (HMC) rose 2% premarket on Wednesday after the automaker reported a 50% drop in first-quarter operating profit. A stronger yen and the impact of President Trump's tariffs took their toll, but the company raised its full-year forecast. Reuters reports: Read more here. China draws red lines on US chip tracking with Nvidia meeting China is pushing back against the US over chips despite their overall trade truce. Last week, Beijing summoned Nvidia (NVDA) staff over security concerns with H20 chips, signaling opposition to the US plans to track advanced semiconductors. Analysts view China's latest move as a warning that it will not allow the US to dominate the chip sector. Bloomberg News reports: Read more here. Trump says he's readying more tariffs on Russian energy buyers Bloomberg News reports: Read more here. Canada to help lumber industry cope with US tariffs: Carney Prime Minister Mark Carney has announced that Canada will provide funds to help the lumber industry prepare for tariffs. Reuters reports: Read more here. Starbucks under pressure again as Brazilian tariffs hike coffee costs Starbucks (SBUX) may soon hike prices on its pumpkin spice lattes and bottled Frappuccinos as it faces cost pressure from the 50% tariff on Brazilian coffee imports, which takes effect on Aug. 6. Yahoo Finance's Francisco Velasquez reports: Read more here. EU continues to press for tariff exemption on wine, spirits as part of US deal The EU is pushing for its wine and spirit exports to be exempt from US tariffs, while both sides work towards refining the deal they agreed last month. The WSJ reports: Read more here. Countries push for last-minute deals as Thursday tariff deadline looms Global importers are bracing for President Trump's next tariff deadline on Thursday morning, when the president's tiered approach to tariffs is expected to take effect. Yet some of the details around trade agreements remain fuzzy. Yahoo Finance's Ben Werschkul reports: Read more here. Trump's copper tariffs apply to $15B of products so far President Trump's copper (HG=F) tariffs are due to hit imports valued at more than $15B in 2024, highlighting the potential inflationary impact on American manufacturers. Trump's unveiling of 50% import duties rattled the global copper market last week, because the US president provided a surprise exemption to key forms of wiring metal. But it still leaves significant trade volumes subject to tariffs. Bloomberg News reports: Read more here. Trump threatens EU with increased tariffs if it doesn't meet investment pledge President Trump threatened to hike tariffs on the European Union back to 35% if the bloc fails to live up to a pledge to invest some $600 billion in the US. "A couple of countries came [and said], 'How come the EU is paying less than us?' And I said well, because they gave me $600 billion," Trump said during a CNBC interview. "And that's a gift, that's not like, you know, a loan," he said, claiming that the terms allow the US to direct where the EU invests. Trump says pharma duties could go to 250% President Trump said he would announce tariffs on semiconductor and pharmaceutical imports "within the next week or so." "We'll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it's going to go to 150%. And then it's going to go to 250%, because we want pharmaceuticals made in our country," Trump said during a CNBC interview. He said semiconductor and chip tariffs would be in a "different category." US tariff on EU goods set at flat 15% The EU said on Tuesday that European Union goods entering the US face a flat 15% tariff, including cars and car parts. The rate includes the Most Favoured Nation (MFN) tariff and won't exceed 15% even if the US raises tariffs on items like semiconductors and medicines. The EU said it still expects turbulence in its trade dealings with the US. Reuters reports: Read more here. Trump says he plans to set tariffs on computer chips at 100% President Trump said on Wednesday at a press conference with Apple CEO Tim Cook that he is planning to set a 100% tariff on semiconductor imports. Companies that pledge to invest in manufacturing in the US, however, will be exempt from the tariff. Reuters reports: Read more here. President Trump said on Wednesday at a press conference with Apple CEO Tim Cook that he is planning to set a 100% tariff on semiconductor imports. Companies that pledge to invest in manufacturing in the US, however, will be exempt from the tariff. Reuters reports: Read more here. Apple set to dodge bulk of India tariffs Yahoo Finance's Dan Howley reports: Apple CEO Tim Cook has arrived at the White House. He is scheduled to speak with President Trump this afternoon and unveil an additional $100 billion investment in US manufacturing, on top of the $500 billion commitment already pledged by the company. Yahoo Finance's Dan Howley reports: Apple CEO Tim Cook has arrived at the White House. He is scheduled to speak with President Trump this afternoon and unveil an additional $100 billion investment in US manufacturing, on top of the $500 billion commitment already pledged by the company. Modi's rival blasts 'bully' Trump as public opinion hardens Rahul Gandhi, Narendra Modi's most recognizable political rival, has come out to call President Trump a "bully" for his negotiation tactics. Bloomberg reports: Read more here. Rahul Gandhi, Narendra Modi's most recognizable political rival, has come out to call President Trump a "bully" for his negotiation tactics. Bloomberg reports: Read more here. Trump order lowering tariffs on EU autos still days away: source European automakers will have to hold on a little while longer before President Trump lowers auto tariffs as EU-US negotiations continue. Reuters reports: Read more here. European automakers will have to hold on a little while longer before President Trump lowers auto tariffs as EU-US negotiations continue. Reuters reports: Read more here. Alcohol groups say tariffs put $2B in sales and 25,000 jobs at risk In a letter to President Trump, a group comprising of 57 alcohol industry firms have said that Trump's tariffs of 15% on EU goods could reduce the value of alcohol sales by almost $2B and put 25,000 jobs at risk. Reuters reports: Read more here. In a letter to President Trump, a group comprising of 57 alcohol industry firms have said that Trump's tariffs of 15% on EU goods could reduce the value of alcohol sales by almost $2B and put 25,000 jobs at risk. Reuters reports: Read more here. Trump hits India with additional 25% tariff over Russia oil buys President Trump has hit India with an additional 25% tariff due to India's purchase of Russian oil. The US president threatened India with higher tariffs earlier this week, which India's Prime Minister Narendra Modi called "unjustified," also calling out the US for its double standard over Russia. In an interview with CNBC on Tuesday, Trump said that India was helping to fuel the war machine. 'They're fueling the war machine. And if they're going to do that, then I'm not going to be happy,' Trump said. In the early days of trade negotiations, relations between the US and India appeared more friendly, with both sides saying they would reach a deal within days. However, over recent months ,things seem to have turned sour as neither side can agree on some of the finer details within the deal, which concern dairy and agricultural products. As a result, a trade war seems to have developed between the two sides, and now with this additional 25% tariff gift from Trump to Modi, the two seem further away from reaching an agreement than ever before. President Trump has hit India with an additional 25% tariff due to India's purchase of Russian oil. The US president threatened India with higher tariffs earlier this week, which India's Prime Minister Narendra Modi called "unjustified," also calling out the US for its double standard over Russia. In an interview with CNBC on Tuesday, Trump said that India was helping to fuel the war machine. 'They're fueling the war machine. And if they're going to do that, then I'm not going to be happy,' Trump said. In the early days of trade negotiations, relations between the US and India appeared more friendly, with both sides saying they would reach a deal within days. However, over recent months ,things seem to have turned sour as neither side can agree on some of the finer details within the deal, which concern dairy and agricultural products. As a result, a trade war seems to have developed between the two sides, and now with this additional 25% tariff gift from Trump to Modi, the two seem further away from reaching an agreement than ever before. Carney says he'll look at opportunities to remove tariffs on US Canadian Prime Minister Mark Carney said that he will look to assess ways in which he can remove some counter-tariffs against the US. Carney's statement seems at odds with his earlier commitments to fight back against President Trump's trade war. Bloomberg News reports: Read more here. Canadian Prime Minister Mark Carney said that he will look to assess ways in which he can remove some counter-tariffs against the US. Carney's statement seems at odds with his earlier commitments to fight back against President Trump's trade war. Bloomberg News reports: Read more here. Trump says Japan to import Ford's huge F-150 pickup trucks President Trump said that Japan has agreed to accept imports of Ford's F-150 pick up trucks. This latest news is seen as a sign that the two sides may not be on the same page when it comes to their understanding of the trade agreement reached last month. Bloomberg News reports: Read more here. President Trump said that Japan has agreed to accept imports of Ford's F-150 pick up trucks. This latest news is seen as a sign that the two sides may not be on the same page when it comes to their understanding of the trade agreement reached last month. Bloomberg News reports: Read more here. US investments under trade deal will be determined by benefits for Tokyo: Japan Reuters reports: Read more here. Reuters reports: Read more here. Honda Q1 operating profit halves on tariffs Shares in Honda Motor (HMC) rose 2% premarket on Wednesday after the automaker reported a 50% drop in first-quarter operating profit. A stronger yen and the impact of President Trump's tariffs took their toll, but the company raised its full-year forecast. Reuters reports: Read more here. Shares in Honda Motor (HMC) rose 2% premarket on Wednesday after the automaker reported a 50% drop in first-quarter operating profit. A stronger yen and the impact of President Trump's tariffs took their toll, but the company raised its full-year forecast. Reuters reports: Read more here. China draws red lines on US chip tracking with Nvidia meeting China is pushing back against the US over chips despite their overall trade truce. Last week, Beijing summoned Nvidia (NVDA) staff over security concerns with H20 chips, signaling opposition to the US plans to track advanced semiconductors. Analysts view China's latest move as a warning that it will not allow the US to dominate the chip sector. Bloomberg News reports: Read more here. China is pushing back against the US over chips despite their overall trade truce. Last week, Beijing summoned Nvidia (NVDA) staff over security concerns with H20 chips, signaling opposition to the US plans to track advanced semiconductors. Analysts view China's latest move as a warning that it will not allow the US to dominate the chip sector. Bloomberg News reports: Read more here. Trump says he's readying more tariffs on Russian energy buyers Bloomberg News reports: Read more here. Bloomberg News reports: Read more here. Canada to help lumber industry cope with US tariffs: Carney Prime Minister Mark Carney has announced that Canada will provide funds to help the lumber industry prepare for tariffs. Reuters reports: Read more here. Prime Minister Mark Carney has announced that Canada will provide funds to help the lumber industry prepare for tariffs. Reuters reports: Read more here. Starbucks under pressure again as Brazilian tariffs hike coffee costs Starbucks (SBUX) may soon hike prices on its pumpkin spice lattes and bottled Frappuccinos as it faces cost pressure from the 50% tariff on Brazilian coffee imports, which takes effect on Aug. 6. Yahoo Finance's Francisco Velasquez reports: Read more here. Starbucks (SBUX) may soon hike prices on its pumpkin spice lattes and bottled Frappuccinos as it faces cost pressure from the 50% tariff on Brazilian coffee imports, which takes effect on Aug. 6. Yahoo Finance's Francisco Velasquez reports: Read more here. EU continues to press for tariff exemption on wine, spirits as part of US deal The EU is pushing for its wine and spirit exports to be exempt from US tariffs, while both sides work towards refining the deal they agreed last month. The WSJ reports: Read more here. The EU is pushing for its wine and spirit exports to be exempt from US tariffs, while both sides work towards refining the deal they agreed last month. The WSJ reports: Read more here. Countries push for last-minute deals as Thursday tariff deadline looms Global importers are bracing for President Trump's next tariff deadline on Thursday morning, when the president's tiered approach to tariffs is expected to take effect. Yet some of the details around trade agreements remain fuzzy. Yahoo Finance's Ben Werschkul reports: Read more here. Global importers are bracing for President Trump's next tariff deadline on Thursday morning, when the president's tiered approach to tariffs is expected to take effect. Yet some of the details around trade agreements remain fuzzy. Yahoo Finance's Ben Werschkul reports: Read more here. Trump's copper tariffs apply to $15B of products so far President Trump's copper (HG=F) tariffs are due to hit imports valued at more than $15B in 2024, highlighting the potential inflationary impact on American manufacturers. Trump's unveiling of 50% import duties rattled the global copper market last week, because the US president provided a surprise exemption to key forms of wiring metal. But it still leaves significant trade volumes subject to tariffs. Bloomberg News reports: Read more here. President Trump's copper (HG=F) tariffs are due to hit imports valued at more than $15B in 2024, highlighting the potential inflationary impact on American manufacturers. Trump's unveiling of 50% import duties rattled the global copper market last week, because the US president provided a surprise exemption to key forms of wiring metal. But it still leaves significant trade volumes subject to tariffs. Bloomberg News reports: Read more here. Trump threatens EU with increased tariffs if it doesn't meet investment pledge President Trump threatened to hike tariffs on the European Union back to 35% if the bloc fails to live up to a pledge to invest some $600 billion in the US. "A couple of countries came [and said], 'How come the EU is paying less than us?' And I said well, because they gave me $600 billion," Trump said during a CNBC interview. "And that's a gift, that's not like, you know, a loan," he said, claiming that the terms allow the US to direct where the EU invests. President Trump threatened to hike tariffs on the European Union back to 35% if the bloc fails to live up to a pledge to invest some $600 billion in the US. "A couple of countries came [and said], 'How come the EU is paying less than us?' And I said well, because they gave me $600 billion," Trump said during a CNBC interview. "And that's a gift, that's not like, you know, a loan," he said, claiming that the terms allow the US to direct where the EU invests. Trump says pharma duties could go to 250% President Trump said he would announce tariffs on semiconductor and pharmaceutical imports "within the next week or so." "We'll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it's going to go to 150%. And then it's going to go to 250%, because we want pharmaceuticals made in our country," Trump said during a CNBC interview. He said semiconductor and chip tariffs would be in a "different category." President Trump said he would announce tariffs on semiconductor and pharmaceutical imports "within the next week or so." "We'll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it's going to go to 150%. And then it's going to go to 250%, because we want pharmaceuticals made in our country," Trump said during a CNBC interview. He said semiconductor and chip tariffs would be in a "different category." US tariff on EU goods set at flat 15% The EU said on Tuesday that European Union goods entering the US face a flat 15% tariff, including cars and car parts. The rate includes the Most Favoured Nation (MFN) tariff and won't exceed 15% even if the US raises tariffs on items like semiconductors and medicines. The EU said it still expects turbulence in its trade dealings with the US. Reuters reports: Read more here. The EU said on Tuesday that European Union goods entering the US face a flat 15% tariff, including cars and car parts. The rate includes the Most Favoured Nation (MFN) tariff and won't exceed 15% even if the US raises tariffs on items like semiconductors and medicines. The EU said it still expects turbulence in its trade dealings with the US. Reuters reports: Read more here. Sign in to access your portfolio
Yahoo
15 minutes ago
- Yahoo
The rise of Friend Socialism
Tired: still being on your family phone plan well into your 30s. Wired: hopping onto a plan with your chosen family — your friends. You still get the financial advantage of sharing a joint subscription without the embarrassment of your mom floating the cost of your excessive TikTok habit. Let's assume your friends are trustworthy enough to keep up on their part of the monthly payment, of course. Americans are drowning in subscriptions. From phone plans to streaming services, fitness apps, and media, consumers are performing what feels like a constant balancing act of sign-ups (and cancellations). While many of these services are quite affordable on their own, the costs can add up pretty fast — the average US consumer pays for about five video subscriptions a month. You realize that between Netflix, Peacock, Paramount+, HBO Max, and whatever else, you probably just should have gone with a cable package. So, people figure out all sorts of ways to game the system. They stop and start free trials and share passwords among loved ones. Or they go on — and stay on — family plans with their parents, children, etc. Some people are defining family in a broader sense to divvy up costs. They're hopping onto family plans for their cellphones, music streaming, or video content with friends, acquaintances, and even strangers, sometimes bending the rules of the terms of service in the process, other times just being a little liberal in the interpretation of family. "Word-of-mouth is a very powerful acquisition channel, and you could think of this as an extended free trial for all the freeloaders," says Daniel McCarthy, an associate marketing professor at the University of Maryland. More Americans are remaining single and childless. Doing life on your own, while the right choice for many people, can also increase costs. The "singles tax" means there's no significant other to split rent with or help shoulder the burden of a vacation hotel room. Even for people who are coupled up and in family units, the rising cost of living is making all sorts of purchases more challenging. Some people are turning to a version of what I'll call "friend socialism" to make the smaller stuff more affordable. Don't want to pay full price for that Spotify subscription? No worries. Hop on a family plan with your college roommates. Yes, you may have to all list the same address instead of the different ones you live at now, but it's not like there's the Spotify Police asking you and your homeboys for DNA samples. Getting off the family plan is seen as a milestone in the road to adulthood, but many people, because of costs and inertia, stay on. In one recent survey, about one in five American adults said they were still on their parents' phone plans, and while that proportion has gone down slightly over the past few years, one in three people still said their parents paid for some or all of their phone bill. But while they're typically marketed as "family" plans, there's often nothing in the fine print that says they have to be with your relatives. T-Mobile and AT&T, for example, openly state that they can include family and friends. Some people are opting in accordingly. You could think of this as an extended free trial for all the freeloaders. As Nicole Nikolich and her roommate got further into their 20s and increasingly independent, they decided to join forces on a phone plan. "I was just like, we will literally save so much money if we just do this together," she says. Nikolich, an artist who lives in Pennsylvania, jokes that she's the "mom" of the plan, since it's all under her name. At the end of the month, her roommate — who has since moved out — just sends over a Venmo for her portion, and she's since added on her partner, too. "It's been smooth sailing for years," she says. The only hiccup was when one of them lost a phone, and they had to do a group trip to the store together to get it replaced. She would keep adding more people if it saved her money, but she thinks they've maxed out the savings they'd get with multiple lines. "If someone needed it, I would add them," she says, "as long as it was one of my more responsible friends." Rose Petargue, who lives in Missouri, doesn't personally know the people she shares her Nintendo Switch Online subscription with. She offered up the extra slots on her family plan on Reddit a while back, and now she shares her account with a few strangers who took her up on it. One of them lives in Turkey, another in the Caribbean. She doesn't charge them for it — the subscription, which runs her $79.99 a year, isn't expensive for her, and she thinks maybe it's something they couldn't afford on their own. The individual plans cost from $19.99 to $49.99. "There's a community aspect to a lot of games, and it kind of occurred to me that there are some people who can't access that portion of the gameplay," she says. There's really no risk to her, she says. Maybe if one of them "behaved badly" and Nintendo banned their account, but even then, she doesn't think it would affect her. She just adds their emails to the account and that's that. These types of arrangements aren't always foolproof. Friendships always risk being strained whenever money comes into play. One coworker tells me they've heard through the grapevine that their ex-partner stopped kicking in their portion of a group phone plan with friends. Everyone else in the arrangement makes more money, so the ex argues that the rest can afford to support them. I've had a YouTube TV subscription with friends added on as family for years. As it's gotten pricier over time, going from $35 a month when I started it back in 2018 to $82.99 now, I've been tempted to ask people to start contributing, but it also makes me feel like a jerk. Diane Brown, in New England, has no such qualms about feeling like a jerk when she deletes friends from the Peloton account she shares with them. She's largely happy to give out her password to people — her daughter, her sisters, her in-laws, and her friends — as long as they create their own user account, 20 of which can be made on her subscription. But every once in a while, she'll check in to make sure they're still using it, and if they aren't, she axes them and doesn't say anything. Given the $44 cost of the monthly subscription, Brown says she doesn't "feel badly about sharing it." It sounds like the scheme worked out for Peloton, too: One of the friends Brown shared the account with liked it so much she wound up buying her own bike. From a corporate perspective, it would probably be ideal that everyone pays full price for their phone plan or streaming subscription and calls it a day. But the calculation isn't as straightforward as it may seem. "It really depends on the company in question, the stage that they're in, and the lock-in that they have with subscribers," McCarthy says. Account sharing may be a way to get people in the door. That's part of how Netflix took hold; it allowed widespread password sharing as a way to get people hooked. It eventually cracked down on password sharing, but only once the company was making $33 billion a year and once it was sure viewers would be motivated enough to open up new subscriptions of their own. "It's a useful strategy to build usage, understanding and habit formation," says Robbie Kellman Baxter, a consultant for subscription-based companies, in an email. Allowing for account sharing may make a platform or service stickier and improve customer retention. If you and your three best friends are on a shared Verizon phone plan, are you really going to undertake the effort to switch everyone to AT&T? If you pull the plug, you're pulling the plug on five people. Despite their original promise to free viewers from ads, more and more paid platforms are tossing advertising in the mix, meaning eyeballs may be more important than subscription fees. A good chunk of revenue in ad-supported plans comes from advertising, and it's better for business if multiple people are getting hit with a bunch of ads than a single person being exposed to them. "That's made the subscription much more about engagement and view hours as opposed to, 'Is this person going to mail in the check?'" McCarthy says. "It's much less like the gym model, where the best gym member pays their fee but never goes into the gym. Now, suddenly, it's about going in all the time." Sharing the wealth, accounts-wise, is a way for people to save money as prices get higher and subscriptions multiply. To be sure, companies such as Netflix and Disney are cracking down on friend socialism for a reason. Robert Fishman, a senior research analyst at MoffettNathanson, tells me it's become an "increasing point of concern from the media companies to make sure they're getting the appropriate subscription dollars from different households." In an April survey from Pew Research Center, 26% of US streaming users said they used someone else's password, including 47% of the 18-to-29 group. "Looking backwards, the traditional media companies had to find the right balance of trying to have as many people as possible engaged in their content," he says. "But it's more recently shifted to ensuring that they're getting paid for that viewership." From a consumer perspective, it's hard to feel too guilty about playing it a little fast and loose on account sharing. Businesses are the ones who siloed content off and monetized every little thing in the first place. In turn, people find ways to fudge. Perhaps the terms of service on a subscription specify everyone has to be in a family or live in the same household, but it turns out as long as you all are in the same-ish geographic area — or just input the same address — it works just fine. Some groups develop elaborate plans for taking out and sharing various subscriptions, involving spreadsheets and coordination. Others keep it pretty simple. One colleague tells me she and her husband share a YouTube Premium subscription with a bunch of other friends. The company allows up to six accounts total on the plan, and they're all supposed to be in the same household, but YouTube apparently isn't checking. All they have to do is send over their portion to the original account holder once a year. Sharing the wealth, accounts-wise, is a way for people to save money as prices get higher and subscriptions multiply. Across groups of friends, it's a way to ease the financial burden and, sometimes, it can be a little fun, too. The only way everyone can discuss "Love Island USA" in the group chat is if they've all got access to Peacock. I share my Peloton account with a friend, and I like taking a peek to see what workouts she has (or hasn't) been up to. On a more serious note, not everyone has a family to share the family plan with, for a variety of reasons. Or, they'd just rather not wrangle their dad into an Apple Music subscription when he doesn't even have an iPhone, or has only listened to the same Bob Seger CD on a loop in his car for a decade. Some companies are coming around to that. A spokesperson for AT&T tells me they know families can "mean a lot of different things," whether the traditional understanding or not. "We are perfectly fine with customers joining our multi-line and family plans, no matter how they're related (blood, marriage, friends, co-workers, neighbors, roommates, etc.)," they say. AT&T has gone as far as to launch a payment tool to make it easier for people to split their plan costs. People may not be able to share their mortgage cost with the friend who lives across the country, but they can add them to their Strava subscription. The "family plan" can mean whatever family you choose. Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy. Read the original article on Business Insider Solve the daily Crossword
