- American Express expanded its partnership with Uber to include enhanced food delivery and ride-hailing rewards for some US cardholders.
- This move will help incentivize consumer spending and accelerate Amex's pandemic recovery.
- Insider Intelligence publishes hundreds of insights, charts, and forecasts on the Payments & Commerce industry with the Payments & Commerce Briefing. You can learn more about subscribing here.
The card network announced that it's expanding its existing partnership with the food delivery and ride-hailing platform for US consumer Platinum, Gold, and Green cardholders.
Beginning October 27, this group will get access to a one-year Eats Pass membership, which includes free food delivery, 5% off restaurant orders over $15, and free grocery deliveries over $30 in select markets. Additionally, starting in 2021, Gold cardholders can get up to $120 in annual Uber Cash, which can be used for rides and at select dining locations. The rewards build on existing Uber Cash rewards offerings as well as points redemption for restaurants, grocery stores, and airfare.
Amex pivoted its rewards strategy at the start of the pandemic as consumer spending habits shifted. Many consumers, especially those financially affected by the coronavirus pandemic, have leaned more toward rewards offerings than ever before: 66% of cardholders view rewards as a valuable tool to help them purchase the things they need.
To encourage spending, Amex introduced rewards for streaming, wireless services, restaurants, and supermarkets at the start of the pandemic as a way of tapping into shifting consumer spending habits. And its pandemic rewards strategy may have paid off since the card network saw steady improvement across most of its categories in Q3.
Adding new rewards to include enhanced food delivery and ride-hailing offerings may help Amex boost spending volume and increase its customer network.
Food delivery services may continue to see accelerated growth as the pandemic continues, which could lead to increased spending volume. Services like Uber Eats and DoorDash saw increased consumer demand amid stay-at-home orders in the spring and summer, with 78% of consumers saying they maintained or increased the frequency of online food ordering in recent months.
Food delivery demand is likely to carry over into the winter months as outdoor dining phases out and coronavirus cases continue to rise. Therefore, Amex's food delivery rewards integration could help incentivize spending and lead to increased volume for the firm.
And ride-hailing could become a popular alternative to public transport as the pandemic continues, leading to additional spending growth for Amex. As the crisis stretches on, public transportation could pose a risk to consumers, especially those in large urban areas like New York City, which has seen significant declines in ridership compared with last year.
As the winter months draw closer, ride-hailing services like Uber could be a safer alternative. Amex's new rewards offerings may appeal to its consumer base and enable the card network to increase spending and possibly bring in new customers who frequently use these types of services.
Want to read more stories like this one? Here's how you can gain access:
- Join other Insider Intelligence clients who receive this Briefing, along with other Payments & Commerce forecasts, briefings, charts, and research reports to their inboxes each day. >> Become a Client
- Explore related topics more in depth. >> Browse Our Coverage
Are you a current Insider Intelligence client? Log in here.