Skift Take

Uber's launch of a loyalty program explains why Lyft appears to have rushed out a similar announcement earlier this week. Neither company is being generous with details, but at least Uber has committed to officially launching in nine cities this week.

Uber Technologies Inc. is rolling out a new rewards program starting Wednesday, offering its most loyal users cash back on rides, priority airport pickups and free phone support.

The new program, called Uber Rewards, aims to keep passengers in Uber’s ecosystem, offering perks to customers for ordering food, taking more car rides and, eventually, for riding on electric bikes. The strategy to get existing customers to use more services may help Uber Chief Executive Officer Dara Khosrowshahi achieve his vision of Uber as a multifaceted transportation provider, doing business well beyond ride-hailing.

On Monday, U.S. competitor Lyft Inc. also announced a similar loyalty program, which the company said it hoped to roll out by the end of the year. Uber has already released a rewards program for drivers that it’s currently piloting in eight cities. The new program for riders is launching in nine locations Wednesday: Miami and Tampa in Florida, all of New Jersey, Denver, New York City, Philadelphia, Atlanta, San Diego and Washington. The company said it will expand the program to the rest of the U.S. over the next few months.

While Uber Rewards in some respects is following in the footsteps of airlines and hotels, which have long rewarded dedicated customers, the program reflects some of the company’s peculiarities and aspirations.

“We talked to airlines. We talked to Starbucks. We talked to hotels,” said Nundu Janakiram, Uber’s head of rider experience. “We wanted to learn from people what worked and what didn’t for their industry.” But ultimately, he said, the company designed its own program.

Uber will offer a tiered reward system escalating from Blue to Gold to Platinum to Diamond with escalating benefits. The highest-tier riders will receive special access to the company’s best-reviewed drivers.

The cash-reward component of the program is so small as to be almost an afterthought. For example, riders will be able to earn $5 for every $250 they spend on taking rides on UberX. The company is instead emphasizing enticements like allowing riders to lock-in in the price of a trip between two locations, such as home and work, to avoid surge pricing during busy hours. Diamond-level patrons will also be able to receive customer support over the phone.

©2018 Bloomberg L.P.

This article was written by Eric Newcomer from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected]

Free Daily Newsletter

Sign up for the most popular Skift daily download of news, happening, and headlines in the travel world

Tags: loyalty, lyft, uber

Photo credit: A car that operates for both Uber and Lyft is pictured. Uber announced a rewards program Wednesday, following a recent announcement by smaller rival Lyft. Bloomberg