- Uber Technologies, Inc (NYSE:UBER) dropped the 5% discounts on eligible rides for its Uber One subscription service.
- Starting their next billing cycle, subscribers will earn 6% of so-called “Uber Cash” on eligible rides that users can spend on Uber and Uber Eats, TechCrunch cites from an email the ride-hailing company sent out to customers.
- In 2021, the Uber One subscription for $9.99 per month or $99.99 annually, which offered rides discounts, has been a significant demand driver.
- Uber One memberships grew 100% in 2022 to roughly 12 million members.
- While Uber can increase its profit margins by switching to a cash-back offer, it also faces the possibility of losing customers for the discounts.
- Ditching the 5% discount might also lead to losing users to Lyft, Inc (NASDAQ:LYFT), whose Lyft Pink membership still offers 5% off on rides.
- Uber retained benefits like the $0 delivery fee and up to 10% off eligible Uber Eats orders.
- The change comes almost a year after Uber shut down its free loyalty program, Uber Rewards, which allowed riders to earn points for every dollar spent on rides or deliveries.
- In May, Uber reported first-quarter FY23 revenue growth of 29% year-on-year to $8.82 billion, beating the consensus of $8.72 billion.
- Trips grew 24% Y/Y to 2.1 billion, or 24 million per day.
- Revenue from Mobility grew to $4.33 billion (+72% Y/Y), Delivery was $3.09 billion (+23% Y/Y), and Freight at $1.40 billion (-23% Y/Y).
- Price Action: UBER shares traded lower by 0.59% at $37.34 premarket on the last check Wednesday.
- Photo by Gerd Altmann via Pixanbay
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