Your Uber Rides May Get Intrusive With Ads, But Uber Wants To Make More Money And Subsidize Trip Costs

Uber Technologies, Inc UBER launched its advertising division and revealed Uber Journey Ads, an engaging way for brands to connect with consumers throughout the riding process. 

Journey Ads is the latest initiative from a dedicated team formed at Uber this year under advertising veteran Dr. Mark Grether, previously with Amazon.com Inc AMZN Advertising, CEO of Sizmek, and Co-Founder of Xaxis.

The advertising unit will likely help it create a $1 billion business within the next two years by displaying promotions within its apps, on top of cars, and on the back of seats, the Financial Times reported.

Also Read: How Will Lyft’s Service Fee Hike Affect Its Rides?

Uber created the division earlier this year to build on its current ad business, mainly consisting of ads within its Uber Eats app and car-top billboards in a few markets. 

 Uber said its advertising platform was live in dozens of countries and would expand its international footprint over the next year. 

Brands will also be able to have emails sent to Uber’s 122 million active users globally or place ads on the homepage of the Uber Eats app. 

Uber piloted a scheme in Los Angeles and San Francisco in which tablets attached to the back of car seats will display trip information and advertising. Riders would have “full control” over any ads with sound.

“Through our advertising division, we can help leading brands grow their relationships with consumers by connecting them at a moment when a customer is uniquely attentive,” Grether said. 

The move follows similar efforts from DoorDash, Inc DASH and Lyft, Inc LYFT as the gig economy companies turn to advertise as a new high-margin revenue stream. 

An expert said that Uber lagged DoorDash and Instacart regarding revenue generated by search ads. He added that increasing advertising to the trip experience could backfire.

Uber’s head of mobility, Andrew Macdonald, suggested using advertising to subsidize the cost of trips without decreasing drivers’ earnings.

Price Action: UBER shares trade lower by 0.85% at $27.39 on the last check Wednesday.