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Uber Makes a Change That Will Upset Riders

Frequent riders of Uber are about to lose something they really like.

Uber Technologies  (UBER)  is challenged with transitioning its customers to a subscription-based service.

Uber was born into existence by entrepreneurs to allow people to get rides through their cell phones. The Uber ride share app was created and has grown dramatically over the last decade and a half. Now billions of rides have been shared through the app, which has evolved to serve customers worldwide. The ride-sharing company, however, is closing one of its programs that customers have grown to love and launching a new one.

Uber Launches New Program

Uber One is a combination membership to Uber and Uber Eats that starts at $9.99 per month or $49.99 per year. Uber One subscriptions would automatically renew each month or annually per the enrollment date. The perk to signing up for the Uber One subscription is unlimited free delivery on minimum $15 Uber Eats orders. Subscription members will receive 5% off on Uber and up to 10% off non-grocery orders with a minimum order of $30 Uber Eats deliveries and pick up orders among other specials and offers.

Exclusions vary, as discounts do not apply to rides scheduled in less than 30 minutes. Benefits are only applicable to Uber One participating stores. The subscription works to ensure Uber receives a small monthly payment from its occasional customers as it hedges against the potential loss of the customers who are high volume users. New Uber customers can take advantage of the subscription with a free trial for one month.

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Uber Faced Challenges Before

Uber as well as Lyft  (LYFT)  and other contract or gig jobs were on the chopping block when California Prop AB 5 attacked the ride share industry stating that these contract workers were being unfairly categorized and should be employees. Uber and Lyft both fought to have their business models exempt from the proposition. Both ride sharing companies spent millions to get a reversal of the California law. 

Now under Prop 22 in California, Lyft and Uber are exempt and are able to continue to operate their business models with independent contractor drivers because the drivers are free from company control. The battle started in California and was won, but it could mean trouble for the ride share industry in other states.

Uber Set Closing Date of Customer Favorite

Uber will soon end its Uber Rewards as members will cease earning points into the program as of Aug. 31, 2022, however customers will be able to use their rewards until Oct. 31, 2022. Riders were able to earn rewards towards future discounts for Uber rides or Uber Eats deliveries, and discounts had a six-month rolling expiration date.

The rewards program has been a rider favorite since 2018 and was free to join. High frequency riders at the Diamond Tier level will continue to receive phone support but will lose out on other bonuses like free Uber Eats deliveries and free ride upgrades. Uber has not yet said if there will be a new rewards program to replace Uber Rewards. 

Lyft Has What Uber Wants

Uber Rewards customers might find themselves using Lyft as it will continue to offer bonus points with Lyft Rewards. Lyft lets riders earn rewards on every ride good for Delta SkyMiles  (DAL) , Hilton Honors  (HLT) , cash back from Chase  (CCF) , and cash to your Lyft accounts from MasterCard  (MA) .

Uber One is competing against the Lyft member rewards program, Lyftpink. This program, priced at $9.99 per month, offers premium upgrades like priority pickups, exclusive pricing, more laxed cancellation policies, roadside assistance when driving your own car, rental upgrades, Grubhub+ membership, and free bike and scooter unlock.