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Uber and Wendy’s collaborate to help charity, latest in a series of partnerships

Uber’s business model has been paying dividends for the company and wreaking havoc on the taxi industry, and one component of that model is leveraging high-profile partnerships, including its latest with Wendy’s Dave Thomas Foundation.

The partnership, which launched in July, which will raise funds to help find homes for children waiting in foster care, one of many initiatives that the Dave Thomas Foundation for Adoption undertakes on behalf of children. And since Uber’s user base is overwhelmingly made up of younger cohorts that are attracted to brands engaging in charitable donation, the company will likely continue the promotion, which ends on December 31, or find another outlet for its altruistic impulse.

“Any promotion that can improve customer acquisition and the cost of acquisition for Uber is worth it in its eyes,” said Marci Troutman, CEO of SiteMinis. “Customer awareness is a good starting point, and linking this acquisition effort to well known brands is one way to do that.

“Tying these promotions to brands that match up well with Uber demographics—in this case Wendy’s high percentage of the baby boomers and millennials—makes perfect sense,” she said. “By giving free rides and having the charitable contribution by Wendy’s ensure that Wendy’s will ‘buy in’ and help promote Uber to their customer base.

“This process seems to have shown solid ROI.”

Uber and Wendy’s
For the past five months, and up to December 31, Uber has been giving first-time riders who register with the code 4Adoption their first ride under for $15. And, as a part of the promotion, Wendy’s will donate five dollars to the Dave Thomas Foundation for Adoption for each participating ride.

But charitable partnerships are not the only impetus for Uber to collaborate—the company actually has a history of leveraging partnerships in order to accrue publicity and incentivize users to join its service.

Aside from Uber’s use of crowdsourcing in virtually every element of consumer relations, from ride sourcing to coupon distribution, the primary hallmark of its business model are its partnerships with such recognizable brands as Capital One, which gives Quicksilver cardholders 20 percent back on rides; Starwood, which awards passengers hotel points for each ride they take; and Pepsi, which offered users in London free rides in a DeLorean on October 21, Back To The Future Day.

Many of the company’s partnerships come in the form of promotions geared at new users, as is the case with the Wendy’s partnership. Uber’s constant pursuit of expanding its user base through these partnerships is one of the main reasons for its booming dominance in the transportation sector.

Partnership business model
The company recently partnered with McDonald’s through its UberEATS property to test out home delivery in a few cities around the country (see story).

And it proved its adeptness in the social arena through a recent update that removes the cumbersome texting back and forth to get an address from someone to visit and then having to copy and paste into the app. Users now only have to type in a friend’s name and their address will automatically appear and share location updates (see story).

“The market penetration that Uber claims such a high market share is the ride hailing market—a market that contains taxis, limos, Lyft and Uber,” Ms. Troutman said. “Growth for Uber has been quite dramatic in that last two years, taking the biggest bite of this market out of taxis.

“The growth of this market should average about 10 percent per year through 2020,” she said. “There is no solid data on first time users of Uber within this market segment.

“Additionally, if you look at the sharing economy and how it is linked to Internet commerce, you can see that there will be real growth opportunities to expand the market share beyond the current ride hailing market to a potentially much larger audience of people that want someone else to drive them, and Uber fits that bill.”