The increasing use of intelligent technology and digital tools in the business world has rewritten some of the most sacred business rules and forced enterprises to work towards aggressively retaining their customers. Start-ups, in particular, are usually involved in the race to outshine their competitors and often deploy innovative strategies to the same effect. One such industry where the battle for market dominance often makes the headlines is the cab hailing companies, which often go out of their way to reward their customers and continually engage them.

Although Uber has grown to be a global brand in this segment, it has faced intense challenges in various countries from local organisations, including in its own native turf. Uber and Lyft have been involved in a stiff competition in the cab aggregator industry and it was just a matter of time before these companies launched their own Customer Loyalty Rewards Programs to retain their customer base and prevent them from crossing over to their competitor.  In this post we will attempt to understand what makes Uber Rewards a robust and holistic rewards program, and what can businesses learn from the same.

What is Uber Rewards?

Uber Rewards is a loyalty program that Uber piloted in nine US cities in November 2018 and quickly expanded to several more cities in January 2019; followed by a nation-wide launch in March 2019. Members of the programme are eligible to earn points for every dollar they spend while booking an Uber cab and ordering food from Uber Eats. The earned can be redeemed at the rate of 500 points for $5 in Uber credit. The program also has four tiers – Blue, Gold, Platinum, and Diamond – and the thresholds for the same are 0 points, 500 points, 2,500 points, and 7,500 points respectively. Each tier offers a progressively increasing number of benefits, and all members are eligible to earn points from the moment they enrol in the program. Users can spend their credit to avail services of Uber again, which in turn, increases Uber’s growth and expansion.

Why makes Uber Rewards smart?


Simple design

Despite being a hybrid customer loyalty program, Uber Rewards is tremendously simple. The processes, terminology, and the framework have been kept simple and no new significant concept has been introduced. Each activity results in points and a set number of points can be redeemed for Uber Cash. Similarly, cumulative points (in the last six months) determine the tier status of the member and provide access to a host of benefits and perks. The Uber Cash earned can be spent on cab rides as well as Uber Eats orders, and the company has indicated that this might expand to include other redemption options in the future. This will naturally help in expediting the adoption and usage by existing customers and popularise the program among loyal customers in a short span of time.


Practical benefits

By engaging their customers and collecting comprehensive feedback from them, Uber ensured that the perks of the program were relevant to their users. The ideas of providing guaranteed fares, priority pick-ups, and a dedicated customer support helpline originated from interacting with the customers and understanding the kind of benefits they really want from the program. Furthermore, these perks were strategically distributed among the different tiers to ensure maximum positive reinforcements. For example, the second highest tier (Platinum) comes with exclusive privileges like priority airport pickup, and a fixed price between two locations. Similarly, the highest tier (Diamond) provides access to top-rated drivers, a dedicated support line, three free Uber Eats deliveries, and complimentary upgrades of cabs.

Retrospective application

To ensure that existing users of customers are rewarded for their association, upon launch, Uber Rewards calculated the total spending on cabs and food orders in the last six months and assigned members automatically to the relevant tier. This resulted in existing loyal Uber users getting an advantage over new users, and didn’t have to start from scratch as their activities in the last six months were accounted for. Furthermore, all new members begin at the Blue tier, which simply allows for redemption of every 500 points to $5, encouraging users to level up soon after joining the program.


Shorter rewards cycle

Considering the frequent use of Uber among its users, the rewards cycle was fixed at a period of six months, which is half the industry standard. In other words, point aggregation and periods are six months long, and the clock begins on the day a user signs up to be a member of the loyalty program. This makes immense strategic and business sense as unlike other Customer Loyalty Rewards Programs (say that of an airline or grocery store), Uber users book a cab much more frequently and would now be incentivised to use the app even more. After a new tier is unlocked, users stay there for the remaining earnings period and the next six months.

Customer involvement

One of the smartest things that Uber did was that it spent adequate time in user research and did not rush to launch the program. Uber spent nearly one year in designing and testing its Customer Loyalty Program Software by interviewing its customers and getting a pulse of what they want. In addition to providing customers with relevant rewards and benefits, this process inculcated a sense of being valued and recognised in the customers, thus strengthening the brand. The Director of Product at Uber has been quoted saying that the company is committed to investing in their customers and offering the benefits that they actually expect.


Launch timing

As mentioned earlier, Uber is locked in an intense battle with Lyft in the cab hailing market. The timing of this announcement then is all the more interesting, if you consider that Lyft announced its own loyalty program just a few days before the launch of Uber Rewards. Although it has just a few months of head-start over Lyft’s program, this can prove crucial in wooing hundreds of thousands of users. Being the first cab aggregator to offer a dedicated loyal program for its users naturally equips Uber with the first-mover advantage and provides a meteoric launch pad to Uber Rewards.

These, combined with other industry-specific factors, have experts and pundits predicting that Uber Rewards will become a big success with its users. With the many benefits that come along with a well designed and implemented loyalty program, it is no surprise that a company like Uber is betting on it to fuel its growth in the future. But, you don’t have to be Uber or Amazon to make the most of customer loyalty programs. With a powerful and intelligent Customer Loyalty Program Software, like Loyera, you too can implement a comprehensive rewards program for your customers to ensure maximum retention. If you’d like to know more about how Loyera can help your business grow get in touch with us today. Until then, learn more from industry leaders as how you can leverage rewards and benefits to sustain customer loyalty.

Let’s Grow Together!

Get Loyera and supercharge your business NOW.