Uber rolls out its own airlines-style rewards program

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Uber hasn’t taken to the skies yet, but the ride-hail company is already offering a frequent flyer-style rewards program for riders. The program, which launches in nine cities Wednesday, lets ride-hail customers earn perks like cheaper fares, better customer support, and priority pickups at airports. It’s another in a series of product announcements from Uber aimed at winning over customers — and impressing investors — ahead of the company’s planned IPO in 2019.

Opting in to Uber’s new rewards program is free. Much like it did with drivers last month, Uber Rewards breaks down into four categories: Blue, Gold, Platinum, and Diamond. Riders earn points for every dollar spent on Uber’s various products: one point for Uber Pool and Uber Eats orders; two points for UberX, UberXL, Select, and wheelchair accessible vehicles; and three points for Uber Black and Black SUV.

You need 500 points to advance from Blue to Gold, 2,500 points to advance to Platinum, and 7,500 points to advance to Diamond. Points are earned over a six-month period, tied to the date you signed up. When you unlock a tier, you have that tier for the remaining earnings period, in addition to the next six months, before starting at zero in a new earnings period.

For every 500 points you earn, Uber will add $5 to your account to be spent on rides or food delivery. Gold status earns you flexible cancellations — Uber will refund the cancellation fee if you rebook a ride within 15 minutes — and priority support from customer service agents. With Platinum status, you get priority pickups at airports and capped fares between your two favorite destinations, like work and home.

With Diamond status — the crème de la crème — the benefits are numerous: dedicated, 24/7 phone support with Uber’s most experienced customer service agents; complimentary surprise upgrades from UberX to premium products like Uber Black at no extra cost (drivers will still earn the premium fare, with Uber absorbing the difference); access to highly rated drivers; and no delivery fee on three Uber Eats orders every six months.

Uber’s product team spent the better part of a year researching different rewards programs and surveying riders about the types of benefits they’d like to receive, said Nundu Janakiram, director of product of riders. “We wanted to develop benefits that hopefully resonated with users,” he said.

Uber has crunched the numbers on how to unlock each new status over each six-month earning period. Gold status riders typically take Uber Pool twice a week, and Uber X and Uber Eats once a month. Platinum earners are those who take Uber X four times a week and Uber Eats twice a month. And Diamond riders are high-frequency users: Uber X eight times a week, Uber Eats once a week, and Uber Black to and from the airport once a month.

Uber Rewards is coming to nine cities starting November 14th: Miami, Denver, Tampa, New York, Washington, DC, Philadelphia, Atlanta, San Diego, and across New Jersey. The company says it plans to add its bike- and scooter-sharing services to the program at a later date. And an international rollout is expected as well.

This isn’t Uber’s first experiment with rewards programs. Last year, the company introduced its first credit card, which offers rewards for purchases at restaurants, hotels, and, of course, Uber rides.

Uber says its rewards program should be seen as an investment in its customers. Of course, it’s also a relatively easy way to discourage riders from using rival ride-hailing apps. Uber’s main competitor Lyft teased its own rewards program earlier this week, but had few details about the types of benefits it would include. Both Uber and Lyft are expected to go public in 2019. As such, both are racing to introduce new products that compel riders and drivers to spurn competitors, while also showing they can keep costs low and turn a profit.

Uber Rewards will have costs associated with it, but Uber believes the impact will be net-positive. “We think its a relationship-oriented investment,” said Holly Ormseth, product lead for Uber Rewards.