If you were following the Australian Open in recent weeks, there’s a high likelihood that you’ve watched Uber’s latest promotion featuring tennis icon Andre Agassi surrounded by a sea of spectators rocking the mullet hairdo. He states, ‘the savings I get with Uber One membership don’t disappoint’. But as he looks around and notices everyone from spectators, the linesman, the umpire, the players, the cameraman, and even a dog are rocking the comeback hairstyle, he claims it’s ‘disappointing not have a mullet when mullets are back.’
What is Uber One?
Uber One is a subscription option which offers members savings on Uber and Uber Eats. Launching in Australia in November 2021, the program aims to encourage members to be loyal to the brand by offering rewards and benefits. The monthly membership costs $9.99 and an annual membership is $99.99. This isn’t Uber’s first subscription loyalty program. Click here to read more about Uber Pass and Uber Rewards.
Rewards and benefits with Uber One
Uber One has no points or tiers, members need to pay to be a part of the program, and the rewards and benefits are the same for all members, regardless of their spending level.
The perks for Uber One are listed below:
- Free delivery on orders over $15 and grocery orders over $30
- 5% off rides and orders on food, grocery, alcohol and more
- Exclusive access to perks: Premium member support, special offers and promotions, and invite-only experiences
- $5 credit if the ‘latest arrival’ estimate is wrong
Are members willing to pay for subscription loyalty programs?
Are people willing to fork out an extra $10 per month on another subscription service, particularly amid a cost-of-living crisis? According to a survey conducted by LoyaltyOne1, paid loyalty programs are particularly appealing to millennials. 76% of millennials would consider joining a fee-based reward program from a favourite brand, compared to 61% of Gen Xers and 48% of boomers. Acceptance of subscription products is high among young consumers.
Subscription loyalty programs also have their challenges
It is critical for the subscription model to be designed correctly to ensure the program will be profitable2. If the program is excessively generous, the company may incur losses. On the contrary, if the rewards lack sufficient value or if members’ usage frequency is low, joining the program is not justified, resulting in potential financial setbacks. Members need to evaluate and weigh the subscription cost against the rewards and benefits, to determine whether the ongoing expenses align with the perceived value of the perks provided.
Cancellations in subscription loyalty membership is high
According to McKinsey research “50 percent of cancellations occur within the first year of membership. Consumers’ most frequent reason for cancellation was not using the benefits enough to justify the sustained cost. Retaining customers past the critical first renewal requires brands to adopt more nimble and everyday means of rewarding their members, as well as a robust marketing program to keep them engaged3.”
Uber One has a straightforward value proposition
Uber has eliminated the need for members to exert mental effort in assessing the suitability of Uber One by simplifying the benefits and quantifying the potential savings.
- The Uber One membership pays for itself after just 2 orders on Uber Eats.
- Uber claims members are likely to save around $30 per month, although this depends on their usage frequency.
Is Uber One worth it?
If you find yourself indulging in Uber Eats more than twice a month, subscribing to Uber One is a good option for you. As the landscape of subscription loyalty programs evolves, Uber One stands out as a promising and simplified choice for those seeking consistent benefits without the complexity of tiers and points.
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- Loyalty One, (2015). Hard-to-please Millenials Most Open to Joining Fee-Based Loyalty Programs, https://www.loyalty.com/home/insights/article-details/hard-to-please-millenials-most-open-to-joining-fee-based-loyalty-programs.
- Shelper, P. et al. (2023). Loyalty Programs: The Complete Guide . 2nd edn. Sydney, NSW: Loyalty & Reward Co ↩︎
- Boudet, J., Huang, J. and Difloe, R. von (2020). Coping with the big switch: How paid loyalty programs can help bring consumers back to your brand, McKinsey & Company. Available at: https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/coping-with-the-big-switch-how-paid-loyalty-programs-can-help-bring-consumers-back-to-your-brand (Accessed: 06 February 2024).