Could Uber Rewards Program Worsen Traffic Congestion?

Uber customers across the U.S. are now able to earn points for the trips they take as part of the ride-hailing service’s rewards program.

The program also offers perks such as a credit toward a ride and not charging customers a fee when they cancel a ride. Riders earn one point for Uber Pool and Uber Eats delivery, two points for Uber X and Uber XL and three points for Uber Black and Black SUV.

Uber’s competitor, Lyft, is also rolling out a rewards program of its own. On Monday, Lyft launched its public relations road show in an effort to court investors for a $23 billion dollar IPO.

The rewards programs could be good news for loyal customers, but also bad news for cities worried about traffic congestion, says David Zipper (@DavidZipper), a resident fellow at the German Marshall Fund.

“I think it’s a smart move for Uber because it will make people potentially be more loyal to the company at a time when Uber is getting ready to go public,” he tells Here & Now’s Peter O’Dowd. "But for cities, I worry that the structure of Uber Rewards is designed to give an incentive — maybe a small one, maybe a large one, we just don’t know yet — for riders to take individual trips instead of the pooled rides, that Uber itself agrees would lead to less congestion. So in other words, Uber Rewards is designed to nudge people into taking their own trips which will put more cars and vehicles on the streets.”

Here & Now reached out to Uber for a response to Zipper’s concerns. A company spokesperson says the rewards program “was designed so that both the most frequent riders who use low cost options and riders who regularly ride with higher cost products have an opportunity to get rewarded."

On how Uber’s reward program compares to airline frequent flyer programs

“There’s some similarities. And just like with an airline frequent flyer program, you’ll get more points if you get, say, a first class ticket. That’s fine because societally there’s not much of a difference if you buy a first class ticket or an economy plus seat. That’s different though, with ride hail because with ride hail — for Uber or a service like Lyft — if you’re gonna take Uber pool, you’re gonna have less of a carbon footprint, if you will. You’re gonna put fewer cars on the street because you’re sharing your ride as opposed to if you took Uber X or Uber Black or something like that.”

On how much more traffic can be expected

“It’s possible that we’ll see no impact from this. It’s also possible we really could see people could be nudged away from pooled rides. We’ll have to look at the data but there’s no way in mind that the Uber Rewards program is going to actually be a net win for cities. All it could do is either be neutral or be bad for congestion.”

On what cities should be doing

“Cities have leverage. If evidence comes out, and I do hope there will be studies soon to see if Uber and frankly, also Lyft, are taking actions, then cities or states for that matter, could consider using their regulatory and taxation powers to compensate for that. If you have to pay an extra dollar or two to take an individual trip as opposed to Uber pool because that’s the city requirement through tax legislation, that’s probably enough of a push to overcome whatever nudge rewards might create for you to take an individual trip.”

Ciku Theuri produced this interview, edited it for broadcast with Todd Mundt.