Skift Take

Both ride hailing companies are focusing on subscription products, and partners like banks to drive them, as corporate travel remains in a precarious state.

Uber and Lyft are focusing on their loyalty programs, with new partnerships designed to keep members ordering cars, meals and groceries for longer periods of time.

Both have benefited from travel’s wider recovery, reporting record revenue for the fourth quarter ending December 31. But their focus is now on subscriptions to lock in customers.

Uber grew the number of Uber One subscribers to 12 million during 2022, 90 percent up on 2022, it revealed this week as it announced its fourth quarter results on Wednesday.

It managed to launch the cross-platform membership program in France, Japan, Spain, Chile and Taiwan during 2022. Credit cards are a part of the plan too, and it now gives Capital One cardholders up to 24 months of free memberships.

“We think Uber One is a terrific membership program,” said Dara Khosrowshahi, CEO and director, during an earnings call this week. “We are quite actively continuing to innovate in terms of the benefits that we offer, and the results are pretty spectacular.”

In terms of those results, program members spend four times more a month the amount that non-members spend. And globally, 25 percent of its gross bookings come from members, while in the U.S. 40 percent of its delivery gross bookings are from members who are signed up to Uber One.

Feeling Pink

Lyft is also expanding its subscription, Pink, after relaunching it last year. Like Uber, it also partnered with a bank, Chase, and it gives its Sapphire Reserve card members a free two-year subscription.

“With this partnership, we can introduce millions of people to Pink, increase our touch points with business travelers and capture more high-value rides,” said John Zimmer co-founder, president and vice chairman, during an earnings call on Thursday.

The company also expanded its travel loyalty integration with the addition of Alaska Airlines.

The fact that both companies are prepared to take a hit and absorb the costs of new members, in the early months at least, reveals their importance.

‘A Tale of Two Coasts’

As expected considering travel’s recovery, Uber and Lyft reported “record quarters.”

Uber revealed a record number of trips in the quarter, at  2.1 billion, up 19 percent on the fourth quarter in 2021. Revenue was $8.6 billion, and net income was $595 million, which was a third higher than the same quarter in 2021.

For Lyft’s business division, managed bookings grew more than 60 percent year-over-year, following the return of large events and conferences, and were at a record level. Revenue of $1.2 billion was 21 percent up on the same quarter in 2021, but overall it posted a net loss of $588.1 million for the three months to Dec. 31, 2022. compared to a $283.2 million loss for the fourth quarter of 2021.

The duo have been particularly exposed to the U.S. West Coast, home to many tech companies which are among the slowest to return to offices, and more recently have been grappling with widespread layoffs.

Major companies such as Meta, Amazon, Google, Salesforce, Dell, eBay, Microsoft and more recently Zoom have announced cuts.

Paraphrasing Charles Dickens, Khosrowshahi described the situation as “a tale of two coasts.”

“The San Franciscos, Seattles, Portlands, Los Angeleses of our country on the West Coast that are trailing and are off the pace that we see pretty much everywhere else in the world,” he said.

Lyft is also suffering. Logan Green, co-founder and CEO of Lyft, was quizzed on the region and said Lyft had only 60 percent recovered to 2019 levels in the region. “It is still way behind,” he said during the earnings call. “In comparison, the East Coast was much stronger. If you look at a city like New York, it’s more than 100 percent recovered even on a rides basis,” he added.

However, Zimmer noted Lyft would keep leaning in on its relatively new offerings like Lyft Pass and Concierge. “We think that’s a really nice margin opportunity and growth opportunity,” he said. “Our focus on growth will be on Pink, which is our membership program, which focuses on our most loyal users. And we’re happy with the progress we’ve made there.”

And what about Uber Travel — the superapp launched last year that lets users link hotel, flight and restaurant reservations to the Uber app, and reserve rides for entire itineraries using Uber Reserve? Little mention, apart from an update it has expanded it to 10,000 cities globally.

Uber didn’t respond to a request for more information.


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Tags: alaska airlines, business travel, car rentals, corporate travel, earnings, electric cars, hertz, loyalty, lyft, uber

Photo credit: Uber and Lyft reported record numbers for their 2022 fourth quarter. Uber

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