Uber Expands Perks for Uber One Members in Subscription Revenue Drive

In a strategic move to bolster subscription revenue, ride-hailing giant Uber is set to roll out a slew of exclusive perks for Uber One members, including member-exclusive events and experiences.

During Uber’s first-quarter earnings call, Uber’s chief financial officer, Prashanth Mahendra-Rajah, revealed plans to introduce more member-exclusive events, aiming to “surprise and delight” Uber One members. This move underscores Uber’s strategy to increase revenue through subscriptions.

CEO Dara Khosrowshahi disclosed that Uber One’s membership fees are on a run-rate exceeding $1 billion annually. This marks the first time Uber has shared run-rate figures for its subscription service, introduced in November 2021.

Uber One, priced at $9.99 per month or $99.99 annually, offers a range of perks, including $0 delivery fees on eligible food and groceries, up to 10% off certain deliveries and pick-up orders, and enhanced pricing on select rides.

The introduction of member events is not unprecedented, with credit card companies like Chase offering similar perks, such as access to exclusive lounges and VIP events.

In 2022, Uber piloted a feature to facilitate event and restaurant reservations, hinting at the potential integration of such features to provide Uber One members access to exclusive events.

This move aligns with Uber’s overarching strategy to attract more subscribers, who tend to spend more on the platform and utilize a broader range of Uber’s services. Mahendra-Rajah emphasized that members spend 3.4 times more than non-members per month, driving adoption and attachment to Uber’s various services.

Furthermore, Mahendra-Rajah highlighted that members contribute significantly to Uber’s mobility and delivery gross bookings, with 32% generated from mobility and over 45% from delivery.

To enhance Uber One retention, the company is promoting its annual pass, offering users a cheaper monthly option if they commit to a year. This initiative has led to a nearly 200 basis points increase in retention year-on-year.

Uber’s recent partnership with Instacart, enabling Instacart customers to order from Uber Eats restaurants, is poised to bolster Uber’s presence in suburban areas. Khosrowshahi emphasized the importance of getting the basics right and expanding selection, pricing, and service quality to drive growth.

Mahendra-Rajah highlighted growth areas such as Uber for Business, Uber Health, UberX reserve, and shared rides, all growing at an impressive rate year-over-year, with 20% of new customers coming from these products.

Despite reporting a revenue of $10.1 billion and gross bookings of $37.7 billion in the first quarter, marking a significant year-over-year increase, Uber posted a $654 million loss. This unexpected loss was attributed to legal settlement payments and equity investments.

In summary, Uber’s efforts to expand perks for Uber One members and diversify its product offerings reflect its commitment to driving subscription revenue and sustaining growth in an evolving market landscape.