Uber’s found a way to reward themselves, not their customers

10 Dec Uber’s found a way to reward themselves, not their customers

Posted at 13:51h in News & Insights by admin

Uber Rewards is coming to Australia. The brand recently announced the launch of their inaugural loyalty program. Available from early 2020 (with some very loyal customers already having access).

The multinational ride-hailing brand originally launched in 2009 and now operates out of 63 countries¹. This year, Uber is estimated to have over 110 million worldwide users, 4.3 million of which are in Australia (that’s 20% of our population)².

Why did Uber launch a loyalty program?

I highly doubt that Uber customers were demanding a loyalty program. I believe this is Uber’s attempt to stop their customers from using rising competitor brands. In fact ,on a recent trip, I mentioned to the driver that I had joined the program and he immediately said “well that’s designed so that they don’t lose drivers and riders”.

Ola and Didi are certainly becoming more popular, in fact many Uber drivers also drive for the competition and actively promote the alternative options to their riders. Uber realise the impact these upcoming brands have on their market share and have devised a strategy in an attempt to retain their existing customers and drivers.

How does it work?

Firstly, there is no joining fee. So essentially you have nothing to lose. However, they haven’t made it easy to receive rewards. There are several tiers to the points based loyalty program³.

Earn 1 point per eligible $1 on UberPool and Uber Eats
Earn 2 points per eligible $1 on UberX, UberXL, Uber Comfort and Assist
Earn 3 points per eligible $1 on Uber Premier

Let’s explore what the tiers look like:

Blue Membership: Most customers start on blue with entitled access to unspecified special offers.

Gold Membership: Once the customer has accrued 1,200 points, they move to Gold. Customers receive 10% off one Uber Comfort trip per month. For every additional 750 points accrued, customers are entitled to a special reward (see below).

Platinum Membership: Once the customer has accrued 4,000 points they move up to Platinum. With this they receive ‘price confidence’. During busy hours, the customer will be covered by a promotion up to a certain price between their two favourite places.

Diamond Membership: Once the customer has accrued 7,500 points they reach Diamond. Benefits include all of the above, plus premium phone support and complimentary surprise upgrades to higher-end rides if they’re available when they request UberX (this is coming soon however).

Now onto those special rewards, Uber is offering one of the below per 750 points gained (Gold status and above):

15% off orders with UberEats over a three day period.
15% off rides with Uber over a three day period.
A $10 donation to Paralympics Australia in the countdown to the Tokyo 2020 Paralympic Games (a nice touch and one which should generate much needed funds for paralympians).

So, who actually benefits? Uber or their customers?

Uber!

This is a loyalty program which has been designed to benefit Uber – not their customers. I mean, a core benefit for the highest level of membership is premium phone support. How often do people actually call Uber? (maybe if their Uber Eats driver has taken a serious diversion). Uber are in complete control of the benefits that customers receive. They are not personalising the program to meet the needs of their customers. Their blue membership lists unspecified benefits. What does that even mean?

Also, points expire after a six-month period and discounts cannot be rolled over from one month to the next. It’s very much a ‘use it or lose it’ situation.

Competitor Ola has successfully partnered with Virgin Australia to offer riders additional velocity points. Ola also regularly offer discounts of up to 15-30% on car journeys (no points required). Didi offers similar discounts and it’s no secret that Didi drivers are better rewarded than Uber drivers.

Similarly, UberEats competitor Menulog have also partnered Virgin Australia and Singapore Airlines offering up frequent flyer points to their customers when ordering via selected channels.

Time will tell to see the response and success of Uber Rewards. However, I’m not sure this loyalty program will be enough to stop customers from looking to other ride alternatives.

Author:

Michael Woodruff, Head of Growth

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Sources:

¹ https://www.statista.com/statistics/833743/us-users-ride-sharing-services/

² http://www.roymorgan.com/findings/7959-ride-sharing-uber-taxis-december-2018-201904260833

³ https://www.businessinsider.com.au/uber-rewards-australia-how-does-it-work-2019-11