Why Uber Is Devaluing Its Rewards Program Now

Uber is devaluing its rewards program, dropping the option to redeem 500 points for $5 cash. This was the simplest and straightforward redemption option.

There are potentially more lucrative redemptions, but those require you to guess what future Uber activity you’ll engage in before the choice you make expires. For instance there are 15% off Uber EATS and discounts on more premium Uber ride options, though these are generally designed to have value capped at around $7 if you use them for the specified service – and they have near-term expiration dates. The specific redemption options vary over time and sometimes by person.

How Dropping $5 Redemptions Can Help Uber’s Bottom Line

There are two potential benefits for Uber to drop the $5 credit option.

  • Removing the $5 choice incentivizes people to stretch to do additional business with Uber they might not have otherwise done, to prevent the discount they’ve chosen from expiring.

    And it encourages breakage, because not everyone will use the redemptions they’ve chosen whereas a straight $5 credit will be used as long as the person who already uses Uber enough to earn it uses Uber just once more.

In other words “more revenue, lower cost” – provided they don’t turn off customers in the process.

Why Uber Says They Dropped The $5 Redemption Option

Uber told The Points Guy website,

After thoughtful consideration, we made the decision to sunset the $5 Uber Cash benefit in the U.S. starting in late 2019. Users told us that Uber Cash was a less popular option for every 500 points earned and that they wanted more choice, which is why we expanded to include ride and Eats discounts, partner benefits like access to Apple News, free food items, and a large focus on donations per these challenging times. We remain committed to Uber Rewards and recognizing riders for choosing our service.

A Big Shift In Strategy For Uber

Dropping Uber cash redemption option signals a shift in strategy, but it’s not the one Uber says it is. The idea that people weren’t redeeming for $5 cash is just flat out untrue. What walking away from $5 Uber Cash redemptions does though is move away from Uber’s once-hoped for strategy of building their own digital currency.

Uber moved away from cash back to offering its own proprietary cash When they worked with Barclays to relaunch the Uber Visa last fall.

The brand has aspirations of turning ubiquitous adoption of its app, combined with its credit card and other elements of its ecosystem, into a currency that they hoped would ultimately be adopted as a payment method beyond Uber. Once they stop issuing Uber credit as a reward for Uber activity (and the revamped Uber Visa value proposition hasn’t been a success) they’re effectively giving up on this future. You can’t gain adoption of a currency if you aren’t printing the currency.

Given the massive layoffs at Uber, a scaled back vision for the company isn’t surprising even if they haven’t talked about it publicly (and whether their top management – let alone investors – realize it or not).

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. @Gary: Different topic, but any truth to the rumor that Chase may be phasing the Freedom card? Referrals are still showing for the Freedom Unlimited but not the freedom.

  2. Uber is consistently making itself more and more customer unfriendly.

    I am a Platinum member which is the status I achieved by giving Uber significant revenue and when I recently had a problem, they essentially refused to solve it for me.

    Now they are taking away the most reasonable redemption for Uber Rewards.

    The only driving factor to use Uber is Amex credit and discounted gift cards. Otherwise I will switch to Lyft.

  3. I also pushed to get Diamond, and I haven’t noticed much of a difference. The one good thing is there is a tel# you can call, and the support isn’t as bad as Uber’s typical lackluster support even at the Platinum level. I think I have called them twice in 6 months. Also its interesting they have not extended status as a result of covid.

  4. They had tried to reduce the usage of this redemption by pushing it to the bottom of the list , but it was by far the best solution for me. This is a big loss since a lot of my Uber rides were paid by the company. Now might as well do Lyft and get Hilton and Delta miles

  5. Although Uber is easy to use through their phone application, it is a little murky on the question and customer service side. That is a sign that they are no Amazon or Google in terms of being transparent. It is a lot like PayPal Credit Services which is based in Belgium and is extremely difficult to interact with.

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