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Update: Some offers mentioned below are no longer available. View the current offers here – Capital One Quicksilver Cash Rewards Credit Card, Capital One QuicksilverOne Cash Rewards Credit Card
Today, TPG Contributor Richard Kerr looks at different opportunities for earning points, miles and cash back on Uber rides, and demonstrates one particularly potent strategy for maximizing your return.
I’ll be honest, I love Uber. While many cities and countries may not agree with me, the explosion in the popularity of ride-sharing means there is a market for such companies, and that a large segment of the public shares my opinion. Given Uber’s growing products, new partnerships and avenues for getting a discount, riders should have a strategy that maximizes savings and returns on all Uber rides. In this post, I’ll look at options for a range of Uber users and different payment options to see which strategy comes out ahead.
I recognize that not everyone is familiar with Uber. Living in a rural Washington city when Uber started gaining traction, I saw all the headlines and heard the chatter, but didn’t quite grasp what Uber, Lyft and other similar services were really all about. It took a trip to New York City before I had my first Uber experience and saw the reason for all the squawking. If you’re not yet familiar with Uber or if you’ve never taken a ride, it’s more or less like a taxi, but there are some important differences. Except for the actual car ride (obviously), the Uber experience occurs on your smartphone. You simply push a button in the Uber app, and your location is broadcast to nearby Uber drivers. This allows you to skip waving down a taxi on the street or waiting in a long cab line.
Uber offers several levels of service with a range of prices depending on how luxurious of a ride you want. You can get a fare quote prior to hailing a ride in the app. Infamously, Uber has peak rates (known as surge pricing) that can increase the cost substantially, but these are disclosed prior to hailing your ride. When your ride is over, payment occurs automatically via a credit card you’ve stored in the app. No cash changes hands during an Uber ride, including tips.
Finally, just about anyone can be an Uber driver; however, both drivers and passengers are given a rating from 1-5 after each ride. You have the option to decline a driver based on his or her rating.
Uber Partnerships and Savings
With the basics explained, let’s look at the different partnerships Uber has forged over the last couple years that can benefit you:
American Express — Last summer, Amex announced a new partnership with Uber that lets you earn 2 points per dollar when paying with Membership Rewards cards such as The Platinum Card from American Express and Amex Everyday Preferred Card. You can also redeem Membership Rewards points for Uber rides at a (not very good) rate of 1 cent per point (e.g., a $20 ride costs 2,000 points).
Starwood Preferred Guest — After linking your SPG and Uber accounts and completing one qualifying stay per calendar year at any Starwood hotel worldwide, SPG members can earn up to 4 points per $1 spent with Uber. Your email address and last name must match on your linked accounts. Paying with your Starwood Preferred Guest Credit Card from American Express adds another point per dollar spent. Here’s how the points earning breaks down:
|Everyday Earnings||Earnings During Stay|
|Preferred||1 point per $||2 points per $|
|Gold, Platinum||1 point per $||3 points per $|
|Platinum 75+||1 point per $||4 points per $|
Capital One — The Capital One Quicksilver Cash Rewards Credit Card and Capital One QuicksilverOne Cash Rewards Credit Card offer cardholders 20% off Uber rides from now until April 30, 2016. Uber is also offering two free rides (up to $30 each) for new customers who use the coupon code CAPITALONE by June 30, 2015, and then take their first Uber ride by April 30, 2016 and pay with an eligible Capital One card. This offer is only for domestic rides, and isn’t available for UberTAXI. On top of the 20% Uber discount, Quicksilver offers 1.5% cash back on all purchases and no annual fee.
United — Last summer, United and Uber teamed up to allow you to hail an Uber car directly from the United App. If you’re new to Uber, you can earn 1,000 MileagePlus bonus miles when you complete your first Uber ride through the United app.
Referral Codes — As an Uber member, you’ll have a unique referral code that you can post on Facebook, tweet or link to directly. Generally, anyone who signs up with your code will earn $20 toward their first ride, and you’ll earn a $20 credit after their first ride. Uber sometimes increases the referral bonus temporarily.
Promo Codes — Uber routinely comes out with promo codes that will score you free credit toward your next ride.
Uber Maximization Strategy
To figure out the best strategy for saving money with Uber, let’s look at a few different types of Uber users — specifically, those who ride daily, weekly and monthly. I’ll assume the average Uber ride costs $20, which is reasonable from my experience of short hops in NYC and longer rides in Dubai. Considering each of these Uber users over the course of a year, let’s compare savings based on several different payment methods:
- A cash-back card that earns a flat 2% return.
- Starwood Preferred Guest Card — earns 1 point per dollar (not including extra points earned during Starwood stays).
- Chase Sapphire Preferred — earns 2 Ultimate Rewards points for every dollar spent on travel, including Uber rides.
- An Amex Membership Rewards card such as the Premier Rewards Gold Card from American Express — earns 2 Membership Rewards points per dollar.
- Capital One Quicksilver — Offers a 20% discount through April 30, 2016, plus a regular return of 1.5% cash back, for a total savings of 21.5%.
According to TPG’s latest valuations, Starpoints are worth 2.4 cents each, Chase Ultimate Rewards are worth 2.1 cents, and Amex Membership Rewards are worth 2.0 cents. The following chart shows the value of points earned or savings received for various Uber users based on the payment method. Note that these values do not factor in promo codes, referrals or linked SPG account bonuses.
|User (Annual Expense)||2% Cash Back Card||Starwood Amex||Chase Sapphire Preferred||Membership Rewards Card||Capital One Quicksilver|
|Daily User ($7,300)||$146.00||$175.20||$306.60||$292.00||$1,569.50|
|Weekly User ($1,040)||$20.80||$24.96||$43.68||$41.60||$223.60|
|Monthly User ($240)||$4.80||$5.76||$10.08||$9.60||$51.60|
The 20% savings offered by the Capital One Quicksilver cards is pretty impressive, and at least through April of next year, the obvious conclusion is that anyone who uses Uber regularly should think about getting one of these cards. Chase Sapphire Preferred and Amex Membership Rewards cards offer 2 points per dollar, and while TPG prefers Ultimate Rewards points, it’s more or less a toss-up. You might also consider the Citi ThankYou Premier or Citi Prestige Card if you’re a fan of ThankYou Rewards, since both of those cards earn 3 points per dollar spent on travel, including Uber.
Signing up with a referral code, offering your personal referral code to any friends and family who are interested, keeping your eyes open for promo codes and linking your Starwood Preferred Guest account are all musts for every regular Uber user. Beyond that, the 21.5% return from Capital One Quicksilver cards is eye-opening once you actually see the numbers.
What’s your strategy to maximize your return on Uber rides?