The Uber Experience

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.

paying uber

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.

uber visa debit.jpg

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.

amex.png

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!)

ubervenmo

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.

uber location

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.

 

(1) https://www.uber.com/info/amex/
(2) https://blog.producthunt.com/ubers-credit-card-is-bankrupting-restaurants-and-it-s-all-your-fault-af76ea9ca46d
(3) https://www.statista.com/statistics/763617/venmo-total-payment-volume/
(4) https://www.uber.com/newsroom/uber-venmo-team-new-way-pay/
(5) https://www.cnet.com/news/uber-and-venmo-partner-to-make-splitting-ride-fares-easier/

11 thoughts on “The Uber Experience

  1. Great post! I use Uber all the time but I never take the time to wonder what else the company is doing. I think the partnership with Venmo is an ingenious idea that will make life even more convenient for users. I also found your piece about restaurant data collection to be fascinating–it’s such an easy, seamless way for the company to get more information on transactions and work to better improve their services.

    Liked by 1 person

  2. Just when I thought I understood Uber, I learned so much more! I’m really liking their Uber Visa debit card. Uber has received a lot of criticism in the past about how they treat their drivers, and I think this is a good step to help their image. If they want drivers to spend more of their time driving, then they should be able to receive some sort of reward or benefit for gas and auto repair. Also the Venmo implementation will surely make a huge difference in splitting payments. There always seems to be a problem in splitting a fare when I am traveling in a group.

    Liked by 1 person

  3. The world is moving towards digital payments and will never look back, with the increasing prominence of cash transferring apps and blockchain technology, it’s only a matter of time before 1 program takes over. In China, EVERY transaction is made through Alipay, similar to ApplePay, but more universal. You can pay at restaurants, buy groceries from street vendors, even pay homeless people with Alipay. Venmo has really permeated our society and I wonder if it’ll be as ubiquitous as Alipay.

    Liked by 1 person

  4. Great post Angela! I think Uber really is one of the most fascinating companies, and the way they’ve changed the way we all get around blows my mind. Their partnership with Venmo removes so much friction from the payment process for so many people. This has me thinking about how they might further reduce friction on some of their other programs… What if on uber eats, when you’re ordering for several people, you assigned each item to another uber eats or venmo account and split the payment that way automatically! That would eliminate the annoying dividing up and venmo-ing that always happens afterwards. #hireme

    Liked by 1 person

  5. I’ve always been interested in the amount of data Uber collects, and how they use that data in their pricing strategy. I once read that a rider’s return journey is almost always more expensive than their initial one, and that prices also depend on the rider’s battery percentage (You’re more likely to accept a higher price than usual if your phone is on 5%). One thing I have always found funny is how hard people try to avoid that infamous $0.25 split charge, yet many of those same people pay little attention to how the price of the ride itself might fluctuate.

    Liked by 1 person

  6. Thanks for sharing, Angela! I knew some companies like Urban Outfitters were starting to use Venmo as payment, but I had no idea Uber was doing the same thing. It is interesting that they removed the splitting fee when using Venmo to pay because almost everyone I know has a Venmo, so more people will be inclined to just use Venmo instead of paying the additional $0.25. I am glad to hear about their intentions about being more transparent, because there are so many data tracking settings on apps that we as consumers would never think to actively turn off. Great post!

    Liked by 1 person

  7. You can really tell a good blog post when it inspires such great conversation (and some business ideas?)! Great job picking a new and exciting angle on a well-known company.

    Liked by 1 person

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