Uber's BIGGEST WEAPON against Ola, Rapido etc is now live in India

On 19 Dec, I paid Rs 99 for a monthly subscription of Uber’s new loyalty program (Uber One) 🙏🙏

On 19 Dec, I paid Rs 99 for a monthly subscription of Uber’s new loyalty program (Uber One) 🙏🙏

Since then I have earned Rs 783 as 10% credits for the 12 rides I have taken to and from places like Faridabad, Vrindavan, Delhi and Noida.

I discussed this with a senior friend at Ola yday, whose exact words were- “This is A BIG THREAT” 😅

Intrigued, I spent 3 hours yday studying the possible implications of Uber One.

And this is all that my study taught me!

Uber’s home country, the US is the world’s largest ride-hailing market.

And there, Uber One loyalty program for ride-hailing was launched in November 2021.

At that time, Uber held ~71% market share. And today, as per varied news pieces, it holds ~78% of the growing market.

That’s a huge impact delivered by Uber One.

..

But, why did it work so well?

Cuz, Uber offered Uber One subscribers 6% credits that could be used in the next ride.

• This helped Uber increase loyalty among the US’ most frequent ride-hailers, with > 2.5 crore paying subscribers

• This is evident from the fact that an avg of these 2.5cr Uber One users in the US spend 3x of what a non-subscriber spends on Uber (as per Bloomberg)

Result? Biggest competitor Lyft is left with users who don’t book cabs as often 🙏🙏

In a nutshell, via the subscription, Uber shares back a part of what it earns to ensure that the lifetime value earned from a user is maximised.

Thus, it earns less per ride, but more per user over time.

And Uber has played this very very well!

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And this is where we come back to the Indian market.

As aforementioned, Ola’s already losing share. And Rapido and Namma Yatri are rapidly growing.

• In this race, Uber One offering 10% credits back on every ride (vs 5-6% in the US) will help Uber ensure that the most frequent cab-hailers will find Uber to be the most affordable ride-hailing app

• Plus, what do frequent users always want? Priority support and top-rated drivers, which Uber One promises

• In the US it also offers perks from UberEats. And, to make up for it, it’s giving Zomato Gold subscriptions

..

Uber One was launched in India on 27 November.

And I was skeptical when I spent Rs 99 on the monthly subscription.

But, having earned Rs 783 as 10% credits, I was compelled to dive deeper into what its market implications could be.

And, my study says:

Uber will corner the high-frequency ride hailers with its policy to share back a part of what it earns and priority support, leaving rivals with users who have a lower life-time value 🙏🙏

This is the same as things played out with Lyft in the US.

What do you think?

Best,
Jayant Mundhra

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