Transportation

Uber promises member exclusives as Uber One passes $1B run-rate

Comment

Image Credits: Getty Images

Uber plans to deliver more perks to Uber One members, like member-exclusive events, in a bid to gain more revenue through subscriptions. 

“You will see more member-exclusives coming up where members have exclusive access to events and experiences, which will kind of surprise and delight our members,” said Uber chief financial officer Prashanth Mahendra-Rajah Wednesday morning during Uber’s first-quarter earnings call. 

Uber CEO Dara Khosrowshahi said Uber One’s membership fees are “in excess of $1 billion” run-rate. In other words, Uber is extrapolating its current subscription revenue to estimate $1 billion in annual revenue. This is the first time Uber has shared run-rate numbers on its subscription service, which was introduced in November 2021. 

Uber One costs $9.99 per month or $99.99 annually and offers perks like $0 delivery fee on eligible food and groceries, up to 10% off certain deliveries and pick up orders, better pricing on certain rides and more. 

Uber said it would share more information on these experiences in the future, but some members have received emails already about exclusive deals, like a party with rapper Post Malone at the Fontainebleau in Las Vegas.

The ride-hail giant wouldn’t be the first to offer events to members. Credit card companies like Chase, for example, give members in New York City access to a Sapphire Lounge at the South Street Seaport and VIP access to concerts at Pier 17 over the summer. 

Uber in 2022 launched a pilot feature to help customers book events and reservations at restaurants. It was a limited pilot, and Uber has not provided any updates, but it’s possible such features will be leveraged to provide Uber One members access to events.

The introduction of member events is an attempt to attract more subscribers, who tend to send more on the platform and use more of Uber’s products. 

“I’ll remind folks that members spend 3.4 times as much as non-members per month, so it is a great vehicle for us to drive adoption and drive, really, attachment with our various services, as well,” said Mahendra-Rajah. 

The CFO noted that members now generate 32% of mobility and delivery gross bookings, and over 45% of delivery gross bookings specifically. 

The increased delivery spend can be partially attributed to the use of Uber Cash. In 2023, Uber dropped the 5% discounts on rides it offered to Uber One members in favor of a cash-back scheme. Mahendra-Rajah said a quarter of all Uber Cash earned from rides in the U.S. is being redeemed on delivery. For Uber Business riders, that penetration is even higher, with 60% of the Uber Cash earned on rides being redeemed in delivery.

“We think that membership is a powerful lever in terms of general penetration into our marketplace and the frequency of growth that we’re seeing,” said Mahendra-Rajah.

Uber’s strategy for the past few years has been to actively cross-sell customers between its offerings – food delivery to grocery, grocery to alcohol, alcohol to mobility – in order to create in-app stickiness. The Uber One membership is an amalgamation of these efforts. 

To increase retention of Uber One, the company is also pushing its annual pass, which lets users have a cheaper monthly option if they sign on for the year. Mahendra-Rajah said the annual pass has resulted in retention increasing “nearly 200 basis points on a year-on-year basis in March.”

Instacart deal fueling growth in suburbs

Khosrowshahi said during Wednesday’s earnings call that the platform, specifically Uber Eats, is growing faster in the suburbs than in urban areas where Uber has higher penetration. 

“It’s about getting the basics right – building an audience and a brand, increasing selection, making sure we’ve got pricing right and making sure the quality of the service continues to be high,” said the CEO. 

He said Uber’s recent deal with Instacart, which allows Instacart customers to use the app to order from Uber Eats restaurants across the U.S., will help Uber grow in the suburbs. Khosrowshahi also noted that penetration with Domino’s and other merchants make Uber “well positioned to grow into the suburbs.”

In terms of other growth areas to watch out for more generally, Mahendra-Rajah pointed to new products like Uber for Business, Uber Health, UberX reserve and shared rides as areas that are growing 80% year-over-year. The CFO also said 20% of new customers are coming from these new products, as well.  

Uber records loss even as demand grows

Uber recorded a revenue of $10.1 billion and gross bookings of $37.7 billion in the first quarter, a year-over-year increase of 15% and 21%, respectively. Yet despite increased demand, the company posted a $654 million loss – a surprise to analysts who expected a profitable quarter  after Uber reported its first full-year profit in 2023. 

Uber attributed the loss to legal settlement payments and equity investments. 

More TechCrunch

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage…

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

17 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

3 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

3 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies