🚙 5 ways Uber can increase ridership and retention in 2022
AUDIENCE
This article is for B2C Growth Product Managers interested in experimenting with ways to grow LTVs and retentions. Each idea begins with growth tactics you can apply to your product.
SUMMARY
- Increase Weekly Active riders and Monthly Active riders
- Increase rides-planning by syncing Google calendar, and offer “discount” on favorited locations
- Increase ridership by encouraging riders to sign up for Uber subscription packages and, as a byproduct, increase LTV per rider
MISSION
Uber’s primary mission is to reduce personal car use by providing a reliable way to get from A to B. Ubers’ goal is to replace car ownership by equipping riders with transportation modalities.
BACKGROUND
There would be more growth investment as Uber’s profitability is within reach in 2022. Uber will be expected to go beyond profitability and grow bottom-line revenue for shareholders. Also, riders are bouncing back from the pandemic (at the time of this writing).
The Mobility Growth team can identify levers to increase weekly active riders and monthly active riders in their network. As riders resume traveling, going back to the office, and international trip planning, more repeated riders would drive the demand and increase the network’s driver supplies.
According to Pew Research and Wired from 2019:
“Still, the number of habitual riders is small. Only one in 10 users of ride-hailing services say they use these apps at least weekly, including just 2 percent who say they use them every day or almost every day. That’s actually down from 3 percent in 2015. Which means there aren’t that many folks who see ride-hail as an everyday commuting option. Another 22 percent are monthly users, while a majority of riders (67 percent) say they use these services less than once a month.”
How can Uber encourage riders to fulfill more rides between attending events, meeting friends, going to restaurants, shopping, etc.?
BUSINESS OBJECTIVES
Uber wants to increase ridership and increase revenue. Uber looks to increase LTV per rider.
The mobility-growth team would need to evaluate the rider usage frequency and set the north star at growing Weekly Active Rider and Monthly Active Rider — which would increase total Trips booking.
Resurrecting 6-month, 12-month, 18 months churned Uber riders and providing them new ways to reactivate will also boost ridership “post-pandemic.”
KPIs:
- Increase Weekly Active Riders
- Increase Monthly Active Riders
- Increase LTV per rider
- Increase resurrection (riders inactive for last 6,12,18 months)
- Increase accumulative Trips booking
- Increase cross-pollination(riders use more than 1 Uber product)
In Q3 2021:
“Now, mobility continues to be a very significant customer acquisition tool for Eats. So now, a quarter of U.S. first-time eaters are coming from our Ride’s business, which is pretty extraordinary… And then, on the other side, what’s interesting is that 20% of U.S. mobility first trips are coming from eaters. So we just have this cross kind of cross-pollenization of users that’s pretty extraordinary.” — Dara Khosrowshahi — Chief Executive Officer
Growth Levers:
- CRO on app screens
- Shortcuts and Favorites
- Increase/upsell premium offerings
- Category expansion & product lines
- Low-cost Share-rides
- Trip planning and logistics reminder
- Subscription packages
IDEA #1: Add two Saved Places; provide discount
Product Growth Tactic: Create accruing benefits on habits.
Identify your user habit (the action users keep coming back for to your product). Apply incentives to the habits to create “lock-in”, and create high switching costs. The more the users use the feature, the more benefit the users should receive.
Read Sarah Tavel's post on accruing benefits and mounting loss.
Thesis: Uber can provide “discount” fares for riders with 2 saved places, which would increase ridership and retention.
Hypothesis: Riders who favorited 2 locations accumulate an average of 20% more rides in a 6-month period than those without favorite places.
Background: As a caregiver, I would take late night and early trips back and forth Home to the Hospital. To write this blog post, I used Uber primarily as urgent transportation. However, I cannot help but open both Lyft and Uber and compare prices. There is no reason to use Uber as the only ride-share of choice. For riders to have accruing benefits and build habits, Uber can encourage riders to add Saved Places, and the more they use, the more discount & rewards they would receive.
Prompt more riders to add 2 Saved Places. Uber can offer discounts and time-based rides between 2 locations. Use Push Notifications. Create a snooze button to remind the best discount for rides.
UX:
For unsubscribed riders:
- After the ride is confirmed, ask the rider whether to set this location as a Saved Place
- After the ride ended, ask the rider whether to set this Saved Place; explain Uber would offer discounts on rides to this location
For subscribed riders:
- Push notification: “Get at HOME by 9 pm today with Uber. Save $5.”
- Push notification: “Arrive at HOME by 9:15 pm today with Uber. Save $3.”
- Push notification: “Avoid traffic. Arrive at HOSPITAL by 8 am today with Uber. Save $5.”
Success Metrics:
- # of riders who added Saved Places
- % of riders who added Saved Places
- # of riders who travel to Saved Places
- % of riders who clicked on push notification CTA for the discounted rides to Saved Places
- Average bookings per rider in a 6 month period
Further Analysis:
- Offer UberOne and premium upgrade as a way to get more reward points out of the rides between Saved Places.
- Time network and driver facilitations, with the top locations for riders.
IDEA #2: Event Calendar Sync; build habits and provide discount on rides-planning
Product Growth Tactic: Find moments upstream & create reminders
What is the moment the user is in need of your product? Where is the user when making their decision? What blockers and challenges do the users need to think about when making the decision? How do we make it easy for users to decide? How can Uber be top-of-mind for users ahead of ride-share competitors?
For the ride-share apps, it’s planning. There are multiple moments when the users actively plan their path to their destination. Uber can access the schedules and help users solve logistical nuisances (being too late, arriving too early, finding parking, avoiding weather, finding the lowest cost way to get there, reliability, and safety). Additionally, this expands channel notification by creating reminders and offering discounts.
Read more about Jobs-to-be-Done micro-moments.
Thesis: If riders sync their calendars and event schedules, Uber can provide “discount” fares on scheduled events, increasing ridership and retention.
Hypothesis: 10% of Riders are likely to sync their calendars and riders who sync their calendars are 20% more likely to become Monthly Active Riders.
Background: Encourage riders to sync with their calendar. Uber can anticipate riders’ events. Uber can offer scheduled rides for riders to events. Uber can ensure riders can arrive at events safely, conveniently, and on-time to their destination. Shift riders (subconscious) behavior for Uber to become a planning app. Riders can develop habits around trip planning, and Uber can become a planning assistant application.
Uber can offer discounts for earlier rides on upcoming events and avoid congestion and surge pricing.
Furthermore, this develops leverage with companies like Ticketmaster, Eventbrite, or Meetup.
UX:
Unsubscribed riders:
- When rider logs onto Uber, ask the rider to sync their calendar for future discounts
- After the ride ended, ask the rider whether to sync their Calendar; explain Uber would offer discounts on rides to future events
Subscribed riders:
- Push notification: “Parking is hard to find in LOWER EAST SIDE. Order an Uber instead.”
- Push notification: “Get to the WU-TANG CLAN CONCERT stress-free with Uber.”
- Push notification: “Get to the AIRPORT with Uber.”
- Push notification: “Get to LAX Flight 3560 by 7 am for $30 with Uber.”
- Push notification: “Avoid traffic. Arrive on-time for your LAX Flight 3560 with Uber.”
- Push notification: “$30–40 if you take Uber to the airport at 7 am.”
- Push notification: “Save now, order Uber to LAX airport by 6 am.”
Success Metrics:
- % of unsubscribed riders who synced their Calendar
- % of subscribed riders who clicked on CTA
- % of subscribed riders who requested rides from calendar push notification prompts
- # of Monthly Active Riders
- # of Trips booked
IDEA #3: Redeem points anytime; Share Points to Resurrect Riders
Product Growth Tactic: Perception of Control.
For Uber experience: Rides order. Points appear. Uber Cash rewards are given. Uber Cash is auto-used and then forgotten. The system might as well not exist.
As a user, I have no say what happens to my reward. While, ultimately, my points will go into my rides, either to reduce the cost of the ride, as an upgrade, or as a tip. Having control allows me to make that decision and know that I made that decision.
“As UX designers, we try to ensure users will have positive experiences when using our products or accessing our services. This often translates into empowering users, thus giving them the tools to find their internal locus of control.” Read Perception of Control.
Thesis: Allow Uber riders to share and redeem points as cash and gifts.
Hypothesis #1: Riders who redeem points are 10% more likely to become Monthly Active Riders.
Hypothesis #2: Encourage riders to transfer points to other riders would resurrect Monthly Active Users by 5%.
Background:
I interviewed a Platimum Uber rider at a coffee shop. He was a big advocate of using Uber. He also subscribed to UberPass. When going out, he calls Uber and UberEats to take advantage of the savings on behalf of his party. I asked him what value he receives from being a Platinum Uber member or an UberOne member? He responded, “things are cheaper, and I get points.” We reviewed each of the Platinum rewards advantages — he expressed none of it was a priority or a dealbreaker for him. He noticed that there are points and discounts on rides (but he could not explain the points system and how it works). He did express that seeing his monthly receipt and the savings was an important validation for him to continue subscribing UberPass.
In reality, points can be challenging to track and understand when it’s only a mechanism to level up for a prize. In video games, this makes sense; the more effort you put in, the more points you receive, and points can level up your character. However, for Uber point system, (which mirrors more like credit cards or airlines miles), should not be based on the rider’s effort level — it should be based on the rider’s willingness to have repeat purchases and loyalty to the brand, with the knowingness to receive more benefits.
Riders think airline miles and credit card points are a big deal because they can “save up for incredible flights they’d never be able to afford. Like Singapore Airlines suites with beds.” The more I use, the more points I get saved up, the bigger the reward I can redeem later.
To avoid the complexity of the Uber reward mechanism “reaching 500 points to unlock $5”, I suggest riders can redeem points at any time.
- Redeem points as part of driver tips
- Redeem points for ride upgrades
- Redeem points for UberEats
- Redeem points for UberGifts
- Transfer points to friends
Research shows that successful reward redemptions encourage members to work harder to earn the next reward. “Once you succeed you think, ‘Hey, I enjoy this. Let’s do it again’” says Xavier Dreze, Professor of Marketing at Wharton and UCLA.
Encourage power-riders to share points with another Uber friend. Prioritize which Uber friend-rider needed to be “resurrected” — based on Uber app usage in the last 30 days, but if the user did not fulfill a ride. Nudge power riders to share, and provide more value to the Uber network.
Allowing points to be flexible and for use in multiple ways, expands Uber’s push notifications strategy to drive riders back on to the platform.
UX:
- Push notification: “3 more Uber rides this month, get $5 on us.”
- Push notification: “Ride Uber tonight for $3 discount.”
- Push notification: “Almost there! Use your points on Uber before it expires on 12/31/2021.”
- Push notification: “Unlock priority Uber benefits with the next ride.”
- Push notification: “Share your Uber rewards with someone before it expires.”
- Users can send Uber points to friends. Sort contacts by riders who need to be reactivated to active riders.
Success Metrics:
- # of riders click on push notifications
- % of riders click on push notifications
- # of riders visit the rewards page
- % of riders visit the rewards page
- # of Monthly Active Riders
- # of Weekly Active Riders
- # of Reactivated riders (6-month, 9-month, 12-month)
- LTV per rider
IDEA #4: Optimize UberPass/UberOne adoption funnel by allowing riders to “see” Subscriptions benefits
Product Growth Tactic: Product-Led-Growth.
Use your product to convert users and further “lock-in”. Showcase premium offerings and benefits as part of the user experience. Shorten time-to-value realization and increase adoption of subscriptions.
Thesis: With the UberOne subscription, riders would be more likely to take advantage of the loyalty membership perks, upgrades, and discounts against competitor ride-share apps.
Hypothesis: Riders who are aware of subscription benefits are 2x more likely to subscribe to UberOne.
Background: Encourage riders to subscribe to UberOne. Shift portion of Uber transactional rider product to a recurring subscription-based product.
As one Reddit member commented regarding the Uber One program, “Of course, this works just like Amazon Prime for them, “members” tend to use the service more “to get their money worth” and ultimately spend considerably more money than more casual users who might not use it all or use a variety of services.”
In Q2 2021:
“Underpinning all of this is our membership program. Just a year ago we began to roll out Uber Pass in earnest. It now drives 30% of Delivery GBs in the US, and roughly 25% globally. Consumers who regularly engage with both Mobility and Delivery now account for nearly half of our total company Gross Bookings. For these consumers in particular, Pass is a no-brainer, and we see a long runway for increased adoption.” — Dara Khosrowshahi, Chief Executive Officer
UX:
Experiment on the Choose Ride screen, show current users the benefits they would receive if they subscribe to UberOne.
Unsubscribed riders:
- Offer discount pricing or special campaign pricing after the ride has been confirmed. Apply to get the ride at a discounted rate.
- Offer discount CTA at the Monthly report or ride email receipt (for non-UberOne members as well). The cost will be refunded if sign up for UberOne.
- Apply the 5% discount on the order screen with the info icon to learn more.
- Show popup, offer UberOne free* month to sign up when they reached $200
- Display a discounted $ rate on choose ride screen, with an Info icon
- Display a new point offering on the choose-ride screen, with an info icon
- Display new point gained after the ride has ended
- Display a discounted $ rate on choose ride screen, with an Info icon
- Display the accumulated $ saved from the month after the ride has ended
- Display a message, if Estimated Arrival is wrong, earn $5; on the waiting-ride screen, with an Info icon
Success metrics:
Topline metrics:
- # of unique non-UberOne riders (not subscribed) daily
- % of sign up for UberOne daily
- # of impression per unique non-UberOne rider
- Convert % of non-UberOne rider subscriptions
Experiment metrics:
- # of riders click CTAs
- # of riders who see CTA impressions
- % of click CTAs
- % of email open
- # of email open
- % of click to get discounted rates
- % of sign up for UberOne from email
Further analysis:
- What makes riders decide to take Uber vs. Lyft vs. other ride-share apps?
- Which UberOne perks make riders decide to Uber?
IDEA #5: Offer multiple package pass subscriptions & “Unlimited” Rides Monthly Pass
Product Growth Tactic: Bundle Offerings
LinkedIn is an excellent example of bundling premium product offerings based on user-personas. LinkedIn identified monetization based on their user needs: talent recruiter, marketing solution, sales & outreach, and job finders. Uber has not differentiated their experience whether the user is a working-professional traveling across the globe or a local mom looking to get groceries before ordering Uber to go to a concert with her kids.
Identify user personas and create unique packages for your product.
Not only are you building personalized offerings but also increase retention and increase LTV by wrapping combined services. Show users how subscribing to bundle packages would lead to significant savings and benefits.
Read more about Bundle Pricing from Hubspot.
Thesis: Subscriptions encourage rider retention & “lock-in” against competitors and replace car-ownership. Subscription packages made for riders and their needs, promote product cross-pollination and helped riders receive benefits from multiple Uber offerings.
For vehicles driven 15,000 miles a year, average car ownership costs were $9,561 a year, or $797 a month, in 2020, according to AAA. That figure includes depreciation, loan interest, fuel, insurance, maintenance and fees. — NerdWallet
Hypothesis #1: Creating subscription plans per rider-persona-type will increase by 15% Monthly Active Riders and increase 20% Weekly Active Riders.
Hypothesis #2: Riders with Uber subscriptions are 8x more likely to become Monthly Active Riders than riders without subscriptions.
Background:
In Q2 2021:
“As because in many markets, especially suburbs and smaller towns, Eats is sometimes the first way consumers engage with Uber. We’ve launched proactive efforts to convert these Eats first customers into Uber riders. And in Q2, over 20% of Mobility’s first time riders in the U.S. and more than 40% of first-time riders in the U.K.” — Dara Khosrowshahi — Chief Executive Officer
Wrapping product offerings together can be successful. As Uber expands to capitalize more ridership, the Mobility Growth team can experiment with extended use-cases for workers, family, and premium riders.
Group use-cases into packages. Here are 4 use-case types:
- UberOne — Urban living (Uber rides, Uber Eats, Uber grocery)
- UberFamily — Family living (Uber rides, Uber Eats, Uber grocery, Car rentals)
- UberWork — For professionals (Uber rides, priority airport rides, Uber Reserve)
- UberUnlimited — Monthly pass (Uber rides)
UberOne: Target urban members who want extra access, benefits, and premium support on rides, eats, and groceries.
UberWork: For working professionals who travel from airport to hotel. They can earn points & amenities with hotels and airline miles. Uber’s ultimate goal is to use its rider volume to create leverage for partnerships with airlines, hotels, and travel partners. UberWork can also leverage its volume to partner with restaurants and companies and help riders plan their travel and logistics.
UberFamily: Uber can help families with transportation planning, help families pay for each other and share points, and rent cars for family trips. This plan promotes riders across their family group, growing riderships, and helps them take advantage of Uber's multiple offerings — as a “group of riders”. Uber can scale ridership by tapping into each network. Uber will help families with travel planning and safe commute under the UberFamily subscription.
Unlimited: Uber’s ultimate goal is to reduce car ownership and reduce congestion in cities. Uber can further reduce the upfront friction of paying and help riders sign up to pre-paid monthly subscriptions. Additionally, replicating the car ownership experience, and Uber’s “unlimited” rides allow riders to go anywhere anytime. With the right accounting and usage restriction, Uber Unlimited can transform transit as unlimited Metrocard did for NYC.
While the 30-day [Metrocard] cards then — and still do today — require someone to ride at least 47 times to be a better deal than the pay-per-ride discounts, the new passes were designed to encourage use. Original MTA estimates projected 100 million more riders per year, an increase of six percent. ”The goal here,” Gov. George Pataki said to The Times, ”was very simply to empower the rider. Empower the person who takes the subway and the person who takes the bus by giving them the broadest possible range of options as to how they want to choose to use the mass transit system.” — Second Avenue Sagas
UX:
Success Metrics:
- # of subscriptions
- % Uber users who subscribed
- # of Monthly Active Riders
- # of Weekly Active Riders
- # of Reactivated riders (6-month, 9-month, 12-month)
- # of Trips booked
- LTV per rider
RECAP
Uber’s mobility growth team can identify triggers and help riders understand the accruing benefits of using Uber. Riders can “lock-in” to Uber if they are: made aware of the point system can help save them money, syncing event calendar can help them save time on trip planning, and seeing the benefits from Uber subscriptions would save them time and money.
Packaging Uber products into various subscription offerings will accelerate the adoption of Uber. Riders and rider retention will increase as a result of subscriptions.
“As far as Uber pass goes, the most important factor for Uber pass for us is what is the retention rate. And what we’re seeing is after some optimization, building up the product, etc. The retention rate for our cohorts that are with us more than six months is now 98% retention rate on a month-on-month basis.”
“So now that we have really perfected the product, driven the savings, etc. We can now lean into member growth. The vast majority of member growth is going to be organic. It’s putting the product in front of both our riders and drivers.”
As more people are vaccinated, global transportation is on a rebound. Uber will see organic growth come back. This also means a new opportunity to drive retention, rider stickiness and deliver a new travel planning experience.
Read other posts by Gary:
- Product Strategy for LinkedIn Stories and Creator Suites
Adapt (now retired) Stories to LinkedIn and activate creators - Ultimate 8 Step Guide to Winning Hackathons
What I learned after 55 Hackathons
I am passionate about writing articles, analyzing products, and brainstorming how to grow them. Shoot me a LinkedIn message if you want to discuss and chat.
