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Understanding the ROI of Uber One's membership (from Uber's perspective)
One would be surprised at how impactful this subscription program is in boosting Uber's bottomline while saving consumers money on delivery fees.
Dissecting the Markets
May 09, 2025
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Earlier this week, $UBER ( ▼ 0.57% ) reported their Q1’25 earnings results. From a broader view, Uber’s rideshare and delivery businesses continue to grow. Uber’s advertising business grew by 60% YoY. In terms of Waymo’s utilization rates on the Uber network, CEO Dara Khosrowshahi said there’s high utilization of Waymo vehicles on the Uber network.
Overall, Uber is a thriving business. And it’s interesting to see how their Uber One subscription, which is meant to help customers save money, is contributing more to the profitability of Uber as a whole. As we analyze the ROI of the Uber One membership program, we will use the known benefits and a sample Uber Eats receipt to help understand the ROI of the membership program.
Uber One Membership ROI Analysis
We know the membership costs $9.99 per month. The benefits that subscribers get include:
$0 delivery fees
6% back in the form of Uber credits
up to 10% off on delivery and pickup orders over the minimum subtotal
exclusive offers
Subscribers save an average of $27/month
Management has noted in their Q1’25 earnings release that Uber One members spend 3X more than nonmembers.
When someone places a fee on Uber Eats for delivery or pickup, these are the fees that they will see (source):
Delivery Fee: Covers shopping and delivery costs, varying by merchant based on demand, location, and availability of nearby shoppers and couriers. You’ll always know the Delivery Fee before placing your order. Uber collects this fee; it is not a gratuity. Shoppers and couriers also receive payment per local laws.
Local Operating Fee: Offsets increased costs from regulations imposed on third-party food delivery platforms. Uber collects this fee; it is not a gratuity. Couriers also receive payment per local laws.
Service Fee and Other Fees: These fees vary based on factors like basket size and help cover order-related costs. You pay $0.10 of these fees directly to Uber for marketplace services (such as facilitating access to couriers and merchants), and the rest is given to your courier, who may pay a portion of these fees to Uber for various services, including lead generation, payment processing, issue support, and other ancillary services. Fees do not constitute gratuities.
Small Order Fee: Applies when an order subtotal is below a certain amount. This fee varies by city but can be removed by adding more items to your cart.
Delivery Adjustment Fee: Covers updates made after placing your order, such as changing your delivery address, and compensating the delivery person for extra time and effort.
Marketplace Fee: Applies only to orders delivered directly by the stores and helps operate the platform. This fee may be charged as a percentage of an order subtotal or a flat fee, depending on location. Minimum and maximum amounts may apply to the marketplace fee as displayed on the fees information screen.
CA Driver Benefits: Introduced in California to help fund new benefits for drivers following Prop 22, including a healthcare stipend, additional insurance coverage, and a minimum earnings guarantee, among others.
The Uber One membership only removes the delivery fee and service fee from a customer’s order.
Let’s use the example below to understand the benefit of having an Uber One membership.
Here, we can see that the delivery fee for this order was $0.49, and his service fee is $3.54. That means he’d save $4.03 on this order with an Uber One membership, which amounts to 40% of that month’s membership fee. As frequent Uber Eats users order more times, the savings add up and make the $9.99 membership fee a great deal.
Assumptions
When doing ROI analysis, we need to lay out our assumptions first. Here are the assumptions that will be used in the analysis. For this analysis, I will use the Uber Eats receipt seen above.
Here are the assumptions:
Average non-subscriber spends $50/month on Uber services
Average delivery order: $23.58 (based on receipt)
Average ride fare: $20
Product mix: 60% food delivery, 30% rides, 10% pickup orders
Fees based on actual receipt:
Service Fee: $3.54 (15% of subtotal)
Delivery Fee: $0.49
CA Driver Benefits: $2.00
Typical tip: $5.94 (not affected by Uber One)
Non-Subscriber Monthly Revenue
Revenue Source | Calculation | Amount |
|---|---|---|
Food Delivery Commissions | ($50 × 60%) × 25% commission | $7.50 |
Service Fees | ($50 × 60%) ÷ $23.58 × $3.54 | $4.50 |
Delivery Fees | ($50 × 60%) ÷ $23.58 × $0.49 | $0.62 |
CA Driver Benefits | ($50 × 60%) ÷ $23.58 × $2.00 | $2.54 |
Ride Commission | ($50 × 30%) × 25% commission | $3.75 |
Pickup Commission | ($50 × 10%) × 6% commission | $0.30 |
Total Monthly Revenue | $19.21 |
Uber One Subscriber Monthly Revenue
Revenue Source | Calculation | Amount |
|---|---|---|
Subscription Fee | Direct payment | $9.99 |
Food Delivery Commissions | ($50 × 3 x 60%) × 25% commission | $22.50 |
CA Driver Benefits | ($50 × 3X × 60%) ÷ $23.58 × $2.00 | $7.63 |
Ride Commission | ($50 × 3X × 30%) × 25% commission | $11.25 |
Pickup Commission | ($50 × 3X × 10%) × 6% commission | $0.90 |
Total Monthly Revenue | $52.27 |
Costs Associated with Uber One
Cost Category | Calculation | Amount |
|---|---|---|
Waived Service Fees | ($50 × 3X × 60%) ÷ $23.58 × $3.54 | $13.51 |
Waived Delivery Fees | ($50 × 3X × 60%) ÷ $23.58 × $0.49 | $1.87 |
6% Ride Cash Back | ($50 × 3X × 30%) × 6% | $2.70 |
Up to 10% off Orders | ($50 × 3X × 70%) × avg 8% discount | $8.40 |
Total Monthly Cost | $26.48 |
ROI Summary
Metric | Non-Subscriber | Uber One Subscriber | Difference |
|---|---|---|---|
Monthly Revenue | $19.21 | $52.27 | + $33.06 |
Monthly Cost | $0 | $26.48 | - $26.48 |
Net Contribution | $19.21 | $25.79 | + $6.58 |
On average, Uber achieves a strong financial return of $25.79 per subscriber, which is significantly better than the $19.21 contribution from non-subscribers. Beyond the financial benefits, the Uber One membership program increases customer loyalty, enhances Uber’s network effect, enriches the platform with more data, and provides a foundation for additional revenue-generating features.
Conclusion
Overall, Uber’s management team is smart for introducing the Uber One subscription program. While it saves customers a lot in delivery and service fees, it has encouraged customers to order more through their platform and has contributed more to their overall bottom line.
This analysis is how we estimate the ROI of Uber implementing a program like this. The actual analysis that Uber’s Finance team does to determine whether a subscription program like this is beneficial to the company or not is more complicated than what I’ve shown here. If anyone from Uber’s Finance team can show us the financial models or help us improve the analysis we already have here, that would be great.
What do you think of the Uber One membership? Do you see it continuing to grow in the coming years? Do you see it performing well in a recession?
Disclaimer