Wednesday, June 1, 2016
Uber is starting to test a loyalty ridership program
Uber sent an email to LA riders last week announcing they are doing a temporary promotion that looks very much like a loyalty program.
Each UberBLACK ride taken will give riders 200 points, and when they amass 3,000 total points they will be rewarded with a free $25 Uber ride. Essentially, the program is buy 15 get 1 free.
While the company has tested “VIP” loyalty programs in New York and Dallas, they were structured to reward frequent riders with better cars and special events — neither were loyalty programs in the traditional “buy X get 1 free” sense.
This is because Uber has never really had a reason to implement such a program — retention and ridership is at an all-time high, and the company really has had no reason to mess with its success.
Let’s take a quick look at the economics, assuming your average UberBLACK ride is $40. Fifteen rides means you’re spending a total of $600; and you’re getting $25 in return — giving you about a 4 percent “rebate” on Uber rides. Not bad, especially considering the alternative is nothing at all.
So why did Uber decided to finally implement a rewards program?
Since it’s only for UberBLACK, it’s safe to assume that the company is trying to increase rides in that category, at least in Los Angeles. As riders have flocked to UberX for its low prices, UberBLACK drivers have been the ones most affected by the lost business. This is especially true in cities like Philadelphia, where UberBLACK drivers have actually started protesting against UberX.
The promotion is only available through July, and riders have to opt-in by entering the code LOYALUBERBLACK. If it’s successful, it’ not hard to imagine Uber rolling out this program to other cities (like Philadelphia) where UberBLACK ridership is suffering.