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Uber One operating rate exceeds US$1 billion, Uber promises to provide exclusive services to members

Uber plans to offer more benefits to Uber One members, such as member-only events, to earn more revenue through subscriptions.

“You’ll see more member-only services coming soon, giving members exclusive access to events and experiences that will surprise and delight our members,” Uber Chief Financial Officer Prashanth Mahendra-Rajah said Wednesday morning. Uber first quarter earnings report call.

Uber Chief Executive Dara Khosrowshahi said Uber One membership fees are “over $1 billion.” In other words, extrapolating Uber’s current subscription revenue, Uber’s annual revenue is expected to be $1 billion. This is the first time Uber has shared run rate data for its subscription service, which launched in November 2021.

Uber One costs $9.99 per month or $99.99 per year and offers benefits such as $0 delivery fees on eligible food and groceries, up to 10% off certain delivery and pickup orders, certain rides Better prices for car services and more.

Uber says it will share more information about these experiences in the future, but some members have already received emails about exclusive offers, such as Partying with Rapper Post Malone at Fontainebleau in Las Vegas.

The ride-hailing giant isn’t the first company to offer events to members.For example, credit card companies like Chase offer members in New York City Enter the Sapphire Lounge In the summer, you can attend concerts at the South Street Seaport and attend concerts at Pier 17 as a VIP.

Uber in Pilot functionality to be launched in 2022 Help customers book events and restaurant reservations. This is a limited pilot and Uber has not provided any updates yet, but the features may be used to provide Uber One members with the opportunity to participate in the event.

The membership campaign is launched to attract more subscribers, who tend to send more messages on the platform and use more Uber products.

“I would remind everyone that members spend 3.4 times more per month than non-members, so this is a great tool for us to drive adoption and attachment across our various services,” Mahendra-Rajah said.

The CFO noted that members now account for 32% of total mobile and delivery bookings, specifically over 45% of total delivery bookings.

The increase in delivery spending is partly attributable to the use of Uber Cash. 2023, Uber cancels 5% ride discount for Uber One members Support cash back program. Mahendra-Rajah said a quarter of the Uber cash earned on rides in the U.S. is redeemed on deliveries. For Uber Business riders, this penetration is even higher, with 60% of the Uber Cash earned on rides redeemed on delivery.

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

Uber’s strategy Over the past few years, we have been actively cross-selling to customers between their products—from food delivery to grocery, from grocery to alcohol, and from alcohol to mobility—to Create in-app stickiness. Uber One membership is the culmination of these efforts.

To improve Uber One’s retention rate, the company is also launching annual passes, which give users cheaper monthly pass options if they sign up for a year. Mahendra-Rajah said annual pass retention rates “increased nearly 200 basis points year-over-year in March.”

Instacart deal drives suburban growth

Khosrowshahi said on an earnings call Wednesday that the platform, specifically Uber Eats, is growing faster in suburban areas than in urban areas where Uber has higher penetration.

“It’s about laying the foundations – building the audience and the brand, growing the selection, making sure we get our pricing right and ensuring the quality of service continues to be high,” the CEO said.

He said Uber recently struck a deal with InstacartAllowing Instacart customers to use the app to order from Uber Eats restaurants across the U.S. will help Uber’s growth in suburbs. Khosrowshahi also noted that penetration of Domino’s and other merchants puts Uber “well-positioned to grow into suburbs.”

In terms of other growth areas that require broader attention, Mahendra-Rajah pointed to new products such as Uber for Business, Uber Health, UberX bookings and shared rides grew by 80% year-on-year. The CFO also said that 20% of new customers are also coming from these new products.

Uber posts losses despite growing demand

Uber’s revenue in the first quarter was US$10.1 billion, and total bookings were US$37.7 billion, a year-on-year increase of 15% and 21% respectively. However, despite rising demand, the company still recorded a loss of $654 million, surprising analysts who had expected a profit in the quarter after Uber reported its first full-year profit in 2023.

Uber blamed the losses on legal settlement payments and equity investments.

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