Uber announced on wednesday that it is launching its own credit card. People who get approved will be able to start using the card on November 2nd. Uber's card will come with an annual percentage rate of 15.99% to 24.74% depending on your credit worthiness. The card is set up to reward users "by integrating tracking and redemption of points into the Uber app". The card is targeting millennials and their busy lives. The no fee Uber visa card offers many ways to earn rewards points. The rewards are set up with 4% back on dining, 3% back on travel, 2% back on online purchases (which has never been seen before in credit card rewards), and 1% back on all other purchases. The redemption of the points starts at 500 which would get you $5. The card is obviously targeted for frequent Uber users as the points system goes straight into the app which can be used to pay for rides. Most other credit cards have been transitioning to cash back instead of a points system, Uber realizes this but thinks they have a simple system that will be very convenient and beneficial for preexisting Uber users.
I think this is a smart move by Uber to diversify and add something to the user experience that is pretty rare. Their rewards system sounds very beneficial if you are an active Uber user which would apply to a lot of millennials that live in big cities without a car. It will be interesting to see how popular the card gets in the coming months.
http://money.cnn.com/2017/10/25/pf/uber-credit-card/index.html?iid=SF_LN
I agree that this is a smart move by Uber. I think the point system will be useful for users who are frequent Uber riders, but I think Uber credit cards could be more attractive if they gave users the option of earning points or earning cash. Millennials being the main target market is smart because Uber has become a modern way of transportation and can be accessed in many areas. I am interested to see not only how well the cards do, but if other transportation companies will follow in their footsteps. I think if Uber credit cards become very popular, transportation companies like Lyft might jump on board and there could be some interesting competition in the market. Finally, it will be interesting to see if some credit card companies have a decline in sales because of this new product.
ReplyDeleteI'm a little surprised by the idea that there are people who use Uber enough to make the credit card worth it. It seems like Uber wouldn't want to introduce such a huge thing while they're still ironing the kinks out of the ride service and having recently introduced UberEats.
ReplyDeleteGreat article Aunders, very interesting. This can only benefit Uber, and there are certain reasons why. For people who live in big cites, and take Uber very often, no other transportation system has a points system. Your taxi driver doesn't give you a dollar back for every 100 you spend. And as of now, Lyft has no reward program like this either. If the points are tacked onto your account and the rewards are easily accessed through the app, this will make consumers happy, and possibly get more people to switch. Cant wait to see what this brings for them.
ReplyDeleteI agree with Madeleine in that this is quite surprising. However, the fact they introduced it makes sense. People are more likely to use Ubers as opposed to taxis based strictly on price, so the fact they are trying to stimulate consumer usage and giving them incentive to use Ubers is quite impressive. If this becomes a hit, taxis may be ousted in the near future.
ReplyDeleteIt seems like a very smart move by Uber. It will be very beneficial for people who are frequent Uber users to get one of the new credit cars. Also, it may cause more people to start using Uber once they see the benefits they can receive from getting the credit card. This new credit card also differentiates Uber from its competition, but I could see a company like Lyft come up with a similar idea so they don't fall behind Uber. It will be interesting to see how popular the credit card becomes, and if other companies will follow.
ReplyDeleteDefinitely a move for the future. Uber knows its target market well and has strategically made their next move accustomed to this target market: millennials. With the growing popularity of Uber, it was only a matter of time before they initiated some frequent user benefits system. I will say the medium of a credit card is outside the box, but kudos to Uber for thinking of this. I'll be curious to see how effective it turns out to be.
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