AmEx Hitches Ride With Uber in Rewards Partnership

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June 9 (Bloomberg) –- American Express President Edward Gilligan and Uber Co-Founder and CEO Travis Kalanick discuss the launch of a new mobile loyalty program, regulatory challenges and the future of driverless cars. They speak on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Partnership work?

We have a great partnership and great news for mutual partners.

They left member reward programs and we have been working hard to bring the rewards program to life for customers go.

In this case, the uber app with a simple yet elegant integration with numbers.

We will -- we know the card numbers love it.

They spent hundreds of millions of dollars ordering cars through the app so we think this is a great way to bring value, or use the membership rewards points to pay for a ride.

How did the deal come together?

As far as i know, you were a big uber program prior to this.

I am in amex cardmember as well.

It goes both ways.

That is how it began.

I did use uber and travis was a loyal cardmember.

As soon as we met we knew it would work.

Remarkable story.

Congratulations to you.

The evaluation number.

You think about 10 months ago , valued at $3.5 billion.

The -- the latest round but u.s. 17 billion.

How does that happen?

I think the reason this kind of thing happens is though the funding news makes headlines, myself, my team included, we are focused on moving the business forward.

This partnership, i said earlier today i will not be happy until 100% of users are using amex to get around the city.

Of course if 100% of members were uber riders, i would be pretty pumped as well.

You said revenues are doubling every six months.

That is right.

Actually more than doubling.

In fact, this year revenues are growing faster than they were for the first part of last year.

Has it made you profitable yet?

We have an amazon approach to this, which is we are still in a hypergrowth days.

Remember, we are four years old.

Now in almost 130 cities.

We are in saudi arabia.

We are in shanghai.

Kuala lumpur, south africa.

Lex good for you guys as well as you have a global footprint.

It certainly is.

Rex we share a lot of common values about customer service, innovation, about bringing value to customers.

With the program, we are doing all of the above.

Very international expansion.

Is that partly what you will use the latest cash infusion for?

I think growth matters.

Whether it is expanding to be in the cities or offering new features like the loyalty program that we are bringing in, amex customers are way over indexing in usage and want to encourage more of that.

Growth happens geographically but also in terms of engagement with the product itself.

Netflix is an interesting example.

Reed hastings said navy this is getting a little too euphoric because his stock is up 260% in 10 months.

Your valuation is up more than 400% in 10 months.

And he reason to warn investors there might be too much enthusiasm?

I think the key when it comes to enthusiasm or hyper marketplace is to look at the numbers at the end of the day.

If you look at the size and growth we are seeing, in many ways it is unprecedented.

So at the end of the rainbow there is a pot of gold.

That is just our size and growth that meets the needs people are putting out there for the stock.

In other words you think you will have the growth, the revenue to support the valuation?

I think we do.

I think there is meat on this phone if that makes sense.

This has made you a billionaire.

How does it feel?

I haven't been counting.

Come on.

I am so focused on the business i have not sold a single share since we founded it were years ago.

People ask me, in fact i know it is going to the stanley cup finals tonight and i was going to go with him, and i am from l.a., and the kings are playing, and i did not even know.

I used to, self a hockey fan.

I am focused on the business right now and growing it.

Having a lot of fun growing a great team.

Let me ask you something.

I am in amex user myself.

I poured -- hoard all of my points for big-ticket items.

This is a little different because this is sort of a smaller expenditure.

Why embark on this strategy right now, and is it the best use of planes for people?

What is core for the customers is to give you choice.

If you want to save points and go on a family vacation, that is fantastic and have plenty of options for you.

Increasingly one thing that will differentiate is you can use them for everyday expenditures.

What better way then to get a ride into work on uber and amex being there if you choose to use it?

If you do not want to use the points you could double rides which then you can use for the next family vacation.

You have the choice now.

The whole thing is to give customers choice, create value and go where they are.

You have to fight a lot of regulatory hurdle in cities across america.

You face challenges in paris, new york and london.

How do you deal with these?

What are your plans to win the regulatory hurdles?

I think at the end of the day customers are getting around the city much more cheaply.

How does a regulator or the official take that away from the population?

Inexpensive transportation that is high-quality, you should not have.

It is very difficult.

I think with that premise, you say we are in 130 cities but there is only one city ever i have pulled back and that is in vancouver.


Rex we are rolling in riyadh but not in vancouver.

They do not want consumers to have choice.

They outlaw competition and choice.

I know often in miami they have banned the service yet you are operating there.

Are you operating illegally or unsanctioned environment?

We try to get into miami for over two years but what happens is there was a similar type services started rolling out in both of those markets and the cities allow them to operate.

We said we want to participate as well and then we rollout as well.

Thinking about all the challenges travis is facing in different cities from a regulation point of view.

Here is what we focus on.

Our customers use uber, spending hundreds of millions of dollars.

We got to know them a little bit and see this great road story travis is telling you.

It is impressive.

Mostly it is about us creating value, doing things in the industry first way, integrating our value into their apt and it will be surprising and delighting the customer's here.

Any moment now we are releasing the app and you will be able to get double points or use them for rides.

Lex that is great.

I will be downloading it.

How do you compete against rivals?

The way we compete is making it is the highest quality service, the cup times and least expensive right.

Make it affordable.

Make it high-quality.

Really quick pickup times and you win.

What happens is when you have a head start -- -- and have a whole bunch going on in the particular market, the trips per hour is really high, which means the cost per ride will be much lower because they stay very active.

When the price goes down, then more people come on and the price can come down again.

What do you say to those who say the problem with the businesses is there is not a significant barrier to entry?

There may not be a significant barrier to entry but pretty big things affecting the business.

Liquidity turns into productivity which turns into lower prices which turns into more productivity.

If a particular upstart is in the core, we are covering a large area.

It means when you take a ride and go somewhere else you are much more likely to get a ride act.

The coverage area expands as well.

You have been expanding the business.

Uber rush something american express will participate in as well?

Of course.

The bigger he gets, the better it is for you.

What else do you want to expand into?

We're doing a lot of things with the business.

We're doing some experience -- experiments with logistics.

The reason i am really excited about this is that my points now are in my phone.

Wherever i go, my points come with me.

This is something i use every day.

We all do the big travel and vacations in using points is fun, but when i can do it every day, that makes it exciting.

Especially where it is magical and i push a button and a car appears.

You wrote in it recent blog post -- to enable a transportation alternative in cities that makes car ownership a thing of the past, that is in fact your goal.

Make car ownership a thing of the past as you confront the regulatory hurdles, what about the car companies?

You are trying to change the way of life's to a certain extent.

When you push a button and get a ride -- i am not sure if you are a customer.

I am.

You know what it is about, it is pretty good and a pretty good price.

You get a reliable ride ready inexpensive.

That is progress.

That is where this kind of technology and progress will go.

We will obviously the innovating in that way.

I think it is good.

All of the innovation, people talking about driverless cars.

Google putting forth prototypes.

What will that mean for you guys?

I think when the price of taking in uber goes down, that becomes -- it creates us -- an interesting situation for getting around cities.

Driverless cars are a big heart of that.

They are a ways out.

It is going to take a long time before we get to a place where there are hundreds of thousands of cars manufactured and they are safe and the regulatory regimes have dealt with these things in the appropriate fashion.

This relates to american express.

I know if i rent a car i get a certain amount of insurance divided through the american express card.

How do you deal with the insurance aspect of all of this taco we make sure every ride is insured.

Either the particular transportation provider is regulated by the city like in new york city where they have insurance requirements.

$750,000 per instance.

In other cities we pay for the insurance ourselves that covers the trips.

It is high-end insurance way above what the average person would get on the personal insurance policy to make sure the driver, writer and public at large is protected.

You have liability in the case of an accident?

We get insurance to protect on the liability.

So what happens is for every ride and mile traveled there is insurance so that when amex customers go and take a ride on that they know they will have the best in breed commercial insurance for the trip and take.

When do you think you're going public?

Like i said before, we are focused on the business.

We are like a little baby.

Four years old.

You have all of this money.

We will keep you posted.

You are larger now than a lot of travel companies.

I was surprised you are larger than high-end, wyndham, ask edf, hearst.

0-0-- expedia.

I think the true potential is turning transportation, ground transportation, into a service.

If that can happen and car ownership becomes a thing of the past, that will take a lot of time.

I think you then start to fulfill the potential that it represents.

What milestone would you like to reach and think are near -- are really important in the near future before you go public?

The kind of things we think about our can we compete -- continue our growth.

Can we go to more cities?

Can we grow in the big cities we are already in?

Some of the things we look at, are regarding faster this year than last year and how long can we keep that up?

If we can keep that up this whole year, it is a big deal.

So i have a lot of my team that

This text has been automatically generated. It may not be 100% accurate.


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