Joining the rest of the travel industry, Uber and Lyft are planning to roll out their own branded credit cards. According to the following report, Uber will team with Barclaycard for a fall rollout, and Lyft may not be too far behind.
Ride-sharing rivals Uber Technologies Inc. and Lyft Inc. may soon take their fight to your wallet. Uber is rolling out a credit card for its U.S. customers, choosing Barclaycard, a unit of Barclays as the issuer, the companies said Friday. The card will be available in the fall, according to a Barclaycard spokeswoman. Visa is expected to be the network for the card, according to a person familiar with the deal.
San Francisco-based Uber would be the first major ride-sharing company to launch a credit card. It could help the firm lock in more customer relationships, a crucial goal as it faces an invigorated Lyft, which recently raised fresh funds and has been expanding into new U.S. markets. Lyft is also working on rolling out a credit card, according to people familiar with their plans.
Uber, meanwhile, has been grappling with a series of scandals, including charges it tolerated chauvinism, a lawsuit over trade secrets and a depleted executive suite. It is nearing a decision on a new chief executive after the founder Travis Kalanick in June.
Ride-sharing is a relatively new sector in the credit card market, where partnerships with banks in the travel sector have been mostly dominated by airlines and hotels.
An Uber spokeswoman said the company will be launching a co-branded card with Barclays, but declined to share more details. Consumers will be able to use the card outside of Uber. Potential rewards for card users aren’t yet clear.
This is not a real surprise as both ride-hailing companies have millions of riders, as well as opportunities to cross-sell services. Competition is heating up between the two companies, and Uber has been stumbling of late due to some missteps of its own making. So Uber figures a branded credit card will be a valuable marketing and loyalty tool to not only keep existing customers, but also win back those who have driven off with Lyft. In any case, credit card networks and issuers will continue to love the high volume payment transactions and the fees that go along with them.
Overview by Raymond Pucci, Associate Director, Research Services Advisory Service at Mercator Advisory Group
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