Want to build brand loyalty? Uber seems to have found the keys to that vehicle, and now, it’s adding another way to maintain customer loyalty: a monthly, subscription-based model.
Unveiling: Uber Plus.
Depending on the city a consumer lives in, Uber Plus could be cheaper than taking the bus or any other form of transportation. Taking cues from the Amazon Prime concept, Uber Plus asks riders to pay a lump sum up front. From city to city, the costs will range and differ, but the initial upfront price could be as low as $20 for a pack of 20–40 rides at a flat fee. Uber Plus also allows for a reduced fare unaffected by surging (read: volatile) prices.
Uber Plus is still considered a beta program, rolling out in select cities — Boston, San Diego, San Francisco, Miami, Seattle and Washington, D.C. Details are still a bit thin, and the Uber Plus option should be only to select users and on a first-come, first-serve basis.
“Uber has been consistently finding ways to lower prices on rides — from UberX, to UberPOOL, to flat rates on rides during commute hours,” said Nicole Ferry, partner and executive director of strategy for Sullivan, a brand engagement firm. “In many cases, this has meant cannibalizing their own profit in order to simply attract more customers. By offering an even cheaper option with Uber Plus, Uber is becoming an irresistible mode of transportation for consumers, while also becoming more economical than its competitors.”
Being economical means having scale, and subsidizing riders (and drivers, too) is certainly one way to get that. And, as PYMNTS has reported, ridesharing is ripe for competition, with an ever-increasing list of competitors, such as Lyft.
As for continuing to build loyalty, nothing says “brand love” more than a subscription model locking in the loyalty of customers for the long term. Recurring billing is a form of pricing roulette that banks on the fact that, some months, customers use the service not at all and, in others, they use it a lot or just a little — which, at the end of the day, spells profit for the company.
As for whether Uber Plus will engage new and more users or if it’s just another gimmicky attempt to bring in riders in the short term, Harry Campbell, who runs The Rideshare Guy, a blog and podcast, said: It’s both.
“More than anything, it encourages existing users to take more rides with Uber,” said Campbell.
Or, at least, it locks them into paying for those rides, even if they may not use them in the end.