An Extensive Study on Uber’s Loyalty Program

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Ever wondered why some brands become iconic and start to represent the category of product or service they deliver holistically?

This iconic stature is a result of unique concepts, excellent product quality, and a top-of-the-line customer experience. Enhancing customer experience has therefore become a top priority for global brands and companies. A great way to escalate this process is through a bespoke loyalty program.

Uber has successfully leveraged its loyalty program to gain traction in the market and keep both the rider and the driver engaged with the brand. This has already become operational in:

  • Boston
  • Dallas
  • Orange County
  • Houston
  • New Orleans
  • Kansas City
  • Indianapolis
  • Los Angeles
  • San Francisco
  • Fort Collins
  • The Rockies
  • Pittsburgh
  • Lehigh Valley
  • Gettysburg
  • Erie
  • Western Massachusetts

And soon be operational in:

  • Miami
  • Denver
  • Tampa
  • New York
  • Washington, DC
  • Philadelphia
  • Atlanta
  • San Diego
  • New Jersey

Uber’s loyalty program has proven highly lucrative for the company since its launch in 2018.

The Uber Loyalty Program

This free loyalty program and has two aspects: the point and tier system. Uber offers an extensive range of services like Uber Black, UberPool, UberXL, etc. The point system is divided into three categories.

  • A rider can earn 1 point per dollar spent with UberPool, Express Pool, and Uber Eats
  • A rider can earn 2 points per dollar spent on UberX, UberXL, and Uber Select rides
  • A rider can earn 3 points per dollar spent on Uber Black and Uber Black SUV

Once the user joins the loyalty program, he/she will start earning points. Points are automatically added to your account after every payment. A user can monitor points on the Uber Mobile Application. The points have a shelf-life and unredeemed points are null after the expiration date.

Uber’s loyalty program has four tiers – Blue, Gold, Platinum, and Diamond. The points accumulated by the user will determine which tier they belong to. Every new user enrolled in the loyalty program, by default, belongs in the Blue Tier. A blue tier member needs to earn a certain number of points to get promoted to the next tier, Gold. Similarly, a Platinum member needs to accumulate a certain number of points to get promoted to the elite Diamond Tier.

The 2020 Upgrade

In 2020, Uber made some changes to its loyalty program to make the targets achievable in the wake of the pandemic. The new rules allow customers to redeem rewards and get next tier promotion with fewer points. Previously, a member had to earn 500 points to jump to the next tier but under the new rules, the target was reduced to 100 points. The expiration date of the points has been extended to six months from a mere four weeks, which gives the user ample time to utilize and redeem the points. Also, under the new rules, leftover points can be rolled over to new rewards. Uber’s new loyalty program also has no limits on point redemption. Uber is also now offering rewards with third-party affiliate partners such as Apple Music, HBO Max, and Rosetta Stone.

The Uber Pro Program

According to a Stanford study, 68% of Uber drivers quit within 6 months. To reduce churn, Uber has also instituted a new loyalty program for its drivers, designed to enable drivers to earn more money as well as save on gas; the driver needs to earn rewards through a point program. The program offers up to 5% cashback on gas stations, 6.5% cashback on gas at Exxon and Mobil stations, and 25% off on car maintenance. The program also offers 100% tuition coverage as an exclusive reward to Platinum and Diamond tier drivers.

Strengths of Uber’s Loyalty Program

Turnkey Program – Uber is the first of its kind organization, within the digital service sector, that offers a turnkey loyalty program. The loyalty program is designed to keep the user engaged, irrespective of whether they are a new client or a frequent and loyal customer.

Provides a Competitive Motive – The tier system offers a competitive motive to the riders: to earn more points to jump from one level to the next, ultimately becoming a member of the Diamond tier.

Incentivizes all Stakeholders – The loyalty program is designed for both the rider and the driver. The tier system combined with Uber Pro enables complete engagement with both the riders and the driver.

Referral Program– Uber also has a referral program, wherein every referrer earns $5 off on their rides. The referral program itself has resulted in a 100 million user growth.

Shortcomings of the Program

A major shortcoming of Uber’s Loyalty Program is that it restricts the redemption of points. Users are unable to redeem a large sum of points at one go. Also, there is a lack of variety in the option of rewards that are being offered currently.

How Uber Benefits from the Loyalty Program

More than the riders or drivers, Uber’s loyalty program is designed to benefit the company itself. In the wake of the pandemic, travel restrictions, and overall safety concerns, a customer is less likely to step out of the house. Redemption of points on rides has seen a massive reduction; Uber had to pivot in the midst of this unexpected turn of business events by creating its brand extension – Uber Eats. To earn more points, a rider must travel more frequently and to farther locations.

Overall, as the starter point for the loyalty program, the Blue Tier has unspecified rewards and exists as a stepping-stone for the Gold Tier, which is a major win for Uber. Another aspect that works well for Uber is the expiration date of points. More often than not, customers are not even aware of their accumulated points or simply forget to redeem them before the expiration date.

The loyalty program has also given Uber access to priceless customer data, such as their basic information and travel history. This data could be used to create personalized communication and offers for maximum customer engagement.

Uber’s loyalty program is a great example of customer engagement at every level through the tier system, along with enabling Uber to gain online traction, facilitating the accumulation of data points, and helping to foster loyal customers.

Similarly, you could also adopt the loyalty program strategy for increased brand visibility and improved customer loyalty, to know how you too can achieve unparalleled results from a bespoke loyalty program, connect with team Annex Cloud.

 
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