Sizzle of the Week: Uber’s Ecosystem Ambitions
Payments have always been central to the Uber customer’s experience. The magic of a better-than-a-taxi-ride ending and simply stepping out while the payment resolved quietly by itself on the backend was foremost a central appeal for Uber, particularly when stacked against the always somehow broken card readers in the back of cabs that required cash payments.
This week saw Uber carry on in its payments-innovating tradition with the rollout of Uber Cash earlier this week, providing a closed-loop payment network that lets consumers easily add funds to its stored value account for use across the Uber ecosystem.
Uber Cash can be used to pay for rides, of course, but also across the ecosystem Uber has built, which includes things like JUMP Bikes and Uber Eats. Uber Cash will also become the home for Uber’s gift cards, its Visa Local Offers credits, and loyalty and card rewards and redemptions.
“We are already rewarding people with stored value and points, and we also have a gift card program that is going very well,” said Rob Daniel, lead of financial products at Uber, in a conversation on the eve of the program’s launch. “We wanted to formalize a lot of it.”
And though the move was called a mobile wallet play in the media many times this week, Daniel emphasized that the program was really much more about the Uber ecosystem itself, and making it easier for consumers to navigate it more smoothly. Opening up its closed loop to extend beyond the Uber ecosystem is an “interesting possibility” for the future, but Uber Cash’s launch this week is firmly focused on the present.
“We are just giving people a more seamless way to pay on Uber,” Daniel said. “They can get rewarded and have the ability to plan ahead and budget” for their Uber purchases. “They can better plan out their spend across Uber. And we can connect all of our growing platforms and modalities via a single payment method.”
Called a mobile wallet.
And those platforms and modalities have been on the upswing all summer. The announcement of Cash this week caps off a summer full of additions, expansions and revisions out of Uber this summer, as the firm looks to build beyond its traditional stomping grounds as a ridesharing firm, and into being a consumer and commercial ecosystem that offers users a menu of potential services all centered around transportation as its nucleus.
In June, Uber reported it was readying for the rollout of a new pricing structure in which users can get cheaper rides if they are willing to wait longer. The feature remains in testing with Uber employees in L.A. and San Francisco.
“Affordability is a top reason riders choose shared rides, and we’re internally experimenting with a way to save money in exchange for a later pickup,” the spokesperson said in the statement.
And while Uber anticipates that an adjusted fare structure will up its ridership, it is notably already doing pretty well in that department, judging by the major milestone the firm hit in July of completing more than 10 billion trips worldwide.
“We’ve hit some pretty exciting milestones together in the past, and this latest one is no different,” the company wrote in a blog post. “On Sunday, June 10, 173 trips and deliveries started simultaneously at 10:12 p.m. GMT, putting us over 10 billion completed trips.”
The ridesharing company further noted that it has made trips in 21 countries across five continents, and that it has facilitated more than $600 million of payments in the form of tips to its drivers since launching its in-app tipping service in 2017. That’s up from the $50 million it had paid out as of last August 2017.
The big rollout kept coming as summer slid into its final days. In mid-August, Uber noted that Uber Freight is expanding its services by rolling out a platform to enable shippers to tap into the company’s network and manage shipments from a personal computer.
According to Uber, the new freight platform is designed to meet the needs of shippers regardless of size, offering them direct access to a carrier network that provides transparent load price, tenders loads with a few clicks and includes end-to-end shipment tracking.
What’s more, Uber Freight said the platform was developed in close collaboration with shippers to help them reduce the time it would take to complete the process.
“At Uber Freight, we want to reshape the trucking industry by helping carriers and shippers succeed at all levels. Companies like American Tile & Stone and Premier Packaging have already begun using Uber Freight to improve their shipping operations, and we’re excited to now roll out the platform widely to our freight community,” the company wrote in the blog post.
That was Uber Freight’s second big announcement of the season, incidentally. In May, they launched autonomous truck deliveries, with the first hauls driven in tandem with both human drivers and self-driving trucks, completed in Arizona.
And speaking of autonomous driving: As Uber is expanding its ecosystem, it’s also expanding its partner list. According to reports from a few weeks ago, Toyota Motor is gearing up to invest $500 million in ride-hailing company Uber Technologies as part of a deal to work on self-driving vehicles, with an eye toward making them safer and lowering the cost of transportation.
The Toyota investment values Uber at around $72 billion, which is higher than the value SoftBank gave the ride-hailing company earlier in 2018. As part of the deal, Uber’s self-driving technology will be used in Toyota Sienna minivans, which will be operated by Uber drivers. The deal also makes it possible for the cars to be owned and operated by fleet managers outside of Uber.
And, just to make sure no part of the Uber ecosystem was slacking off this summer, the team at Uber Elevate was trying to figure out how to help deliver food through the skies via drones. The goal is to speed up deliveries on the Uber Eats platform.
Whatever you did on your summer vacation, it is probably safe to assume that you were a lot less busy than Uber, which then turned around and launched Uber Cash as the in-house, closed-loop payments and rewards platform to tie together the ecosystem it spent the season beefing up.
And what’s more, the company remains on track for an IPO next year.
The weather wasn’t the only thing sizzling this week, it seems.
Amazon: Yes, Apple was the first company to hit a market cap with all those zeroes – touching a trillion dollars, of course. The milestone was reached and then receded a bit below that storied level. But beyond that number come reports that the company is gaining traction in its efforts to lure advertisers. The “other” category of revenues, which includes the ad business, is growing by triple digits.
Fingerprint on display tech: It’s hard not to point at this one for a sizzle. The FoD market is poised to grow 500 percent next year, states research from Juniper, which also predicts that a major driving factor will be the Android phones. The heady growth rate should come even as Apple forgoes FoD in its own phones.
Alipay: Sees some sizzle in overseas transactions in its continued move beyond Chinese borders. Through the two-month summer period that ended in August, in-store overseas transactions this year bested those seen last year by a factor of 2.6x. Average amounts spent per user grew by 43 percent year on year to RMB 2,955.
Facebook: Not much love here among the younger generation, as Pew Research finds that in the age group of 18- to 29-year-olds – the millennials – 44 percent have deleted the app in the past year, and as many as 64 percent have adjusted privacy settings. The trust seems to be eroding – resulting from, of course, concerns over data privacy.
Brazil: High rates equal low economic growth. Research firm Trading Economics reports that bank lending rates in the country stand at 53 percent. There are only five banks in the country, which has more than 200 million people. With credit card balances seeing interest rates of 270 percent, perhaps understandably, consumers find it hard to consume.
Wells Fargo: No good, terrible week for Wells. The latest news seems centers on rampant falsified reports, from food-related expense reimbursements to doctored documents in the corporate banking division. Now the Justice Department is joining the fray on that last subject, likely a less than welcome bit of news about more alleged bad actors amid the corporate ranks.