We all know that Uber has transformed the way we move around. The company completed an average of 5.5 million rides a day in July 2016 and has completed over 5 billion total trips. With emerging competitors, such as Lyft, providing the same ride-sharing services, Uber has gained a competitive edge by leveraging the Fintech platform.
When we sign up for an Uber account, it requires us to link a payment method, usually in the form of a debit or credit card. This eliminates the extra step consumers have to take when they reach their destinations because all they have to do is call an uber, hop in, and hop out. There is no need to carry cash or worry that their cards won’t register. If payment errors occur, it is between the company and the rider, allowing drivers to focus on getting the rider safely from point A to point B. Overall, it is a cashless experience (unless you are in a city that allows you to select cash as a payment option).
Uber Visa Debit Card – Drivers
On April 3rd, 2018, Uber launched its own branded card from GoBank for their drivers and delivery partners. The debit card allows cardholders to earn rewards on everyday spendings such as gas and groceries. Drivers receive exclusive discounts such as 15% off select automotive maintenance services as Jiffy Lube, 2% Cash Back at Walmart, and 3% Cash Back at Exxon and Mobil gas stations (1). This incentivizes more people to drive with Uber because it not only cuts down their cost while on the road but also helps them save more off the road.
How You Pay Matters – Riders
When Uber teamed up with American Express in June 2014, it began rewarding Platinum Card Members from American Express in ways such as Uber credits and exclusive perks. The new system automatically enrolls the cardholders as an Uber VIP and lets them receive up to $15 Uber credits every month. This form of credit incentive locks in prepaid Uber services.
Another payment rewards option is through Uber’s partnership with Visa. You may have noticed the “Visa Local Offers” when you open your Uber app. It lists the eligible restaurants where you can earn Uber credits when you make a purchase there with your the same Visa card you linked to your Uber account. The company utilizes this system to collect our restaurant spending data, which provides stats on the restaurants we visit, the number of times we visit them, and the type of food we tend to order. Unsurprisingly, this powerful dataset has brought great success to Uber’s food delivery service, UberEats, which has grown by 2400% between March 2016 and March 2017 (2). Within this ecosystem, all sides benefit. Local restaurant partners get more customers, riders receive saving perks, and Uber receives valuable consumer data.
Recently, Uber announced its new partnership with Venmo, a mobile peer-to-peer (P2P) payment app. There are over 22 million Venmo users and the platform had a total net payment volume of $34.2 billion in 2017 (3). According to data collected from last year, over six million payments on Venmo had “Uber” in their descriptions. Needless to say, this seamless integration of both platforms will further improve user experience. The new payment method will allow riders to pay from their existing Venmo balance and easily split the cost of Uber rides or UberEats purchases (4). Before this partnership, Uber and UberEats both allow passengers to split fares within its own app, but that comes with a $0.25 service fee. With Venmo, there would no be no fees (5). The company also created their own exclusive Uber and UberEats emojis for your Venmo descriptions!)
Privacy vs. Convenience
Millennials are shifting towards digital payments. By providing convenient payment methods, a company can gain more customers and provide the better user experience. The ability to transfer money within seconds can encourage consumers to buy a product or pay for a service. However, this also leads to trading our privacy for convenience. For instance, in 2017, Uber received harsh criticism for its controversial tracking policy, where it would track the locations of users 5 minutes after their trip had ended unless the user manually turns off their location. The company’s intention is “to improve pickups, drop-offs, customer service, and to enhance safety”, so it’s revising their approach by being more transparent. Users will have the choice of choosing whether they want to share their location information.
On one hand, it is great that companies are collecting user data in order to better improve their services, but consumers should have more say in deciding what they want to share.