Uber is partnering up with merchants to offer passengers discounts on rides in exchange for making purchases at participating merchants. That's the idea of Uber Offers, which the San Francisco-based company started testing out late last year.
By buying stuff with an Uber-linked credit card via an Offer with participating online merchants, consumers get discounts off their next ride, or even a free ride to local stores. Want a cup of coffee and a box of eclairs from Dunkin' Donuts? Uber Offers will give you a discount of $5 to $20 off your next ride if you use a card associated with your Uber account to make the purchase. Purchases at Shake Shack and Whole Foods can also get you a discount on your next Uber ride. The catch is you have to ride Uber in order to receive Offers: they're only sent to your smartphone after you've scheduled a pickup.
Uber estimates that its passengers spend tens of millions of dollars just before and after getting in the back seat, so the company is using Offers to influence where and how passengers shop. It's good for Uber and merchants. Instead of paying for a ride with a traditional taxi or another ride-sharing service like Lyft, Uber hopes that passengers will choose its service for the chance to score free rides by taking advantage of Offers.
Now the company is testing out an offer from ProFlowers ahead of Mother's Day on May 8, 2016. Just hail an Uber and once you're on your way the Uber app will flash the offer: up to $20 off your next ride if you buy your mom flowers and have them delivered by Friday (May 6, 2016).
Uber Offers is the latest in a series of incentives for riders. The company has already teamed up with many card issuers to offer cardholders special benefits. If you own an American Express credit card you can get 2x points on Uber rides as well as free trips to airports.
But all those bonuses and offers might not last much longer as Uber comes under increasing pressure from lawsuits and regulations.
Uber recently settled class action lawsuits over its drivers' employment status in California and Massachusetts for $100 million, and now the company is facing class similar lawsuits in Florida and Illinois. Uber drivers there allege that the company violated the Fair Labor Standard Act by classifying them as independent contractors instead of employees and are seeking unpaid overtime wages.
As part of the settlement with drivers in California and Massachusetts, drivers will now be allowed to solicit tips and Uber will stop telling passengers that tips are included in their fare. It's unclear if the run of lawsuits will affect Uber's ability to continue to offer discounts on its rides. Currently, Uber only makes $0.19 each ride, according to Bloomberg News, and it has only recently started to turn a profit after years of operating at a loss.