Originally Posted by
acarney
A. Reducing the AF - I'm all for that too, but I suspect that would cause a flood of new customers and we might have certain things being removed. This priority pass access issues, Amex lounge crowding issues, hotel status might not really mean anything anymore if everyone was at that level, etc. I get not wanting to pay $450 to $550 and instead just ~$250 or something, but that entry into the card might open up a lot more people to it then the programs can handle. Think CSR and their 100k pts offer. That seems to be causing some issues with priority pass lounge access and such...
B. I mean an advertising/marketing on Uber's side, not Amex. Yes all the perks Amex offers are marketing and advertising the Amex card to people to get them to use it, but this feels like Uber advertising/marketing to Amex card holders directly through the Amex card.
Think of the travel perks. They are good on basically any airline (and with Chase airline, parking fees, shuttle buses, etc) with the restriction of picking one at the start of the year and using that. Amex limits it to only "fees" like baggage and stuff (but there has been a pretty easy work around for a long time). I see that limit there as a half hearted attempt to hope some people don't use that full perk every year. BUT, it's a wide open perk that advertises the Amex card to anyone that travels. I feel like the Uber one is Amex allowing Uber to advertise their service.
If I don't care about Uber and Amex doesn't care about Uber (do they own stock? Are they the parent company of Uber? Why limit it just to Uber? Etc) then the only reason I can see it being limited to just that one company is if Uber entered a partnership with Amex because to Uber it was worth the cost to grow their business. Thus advertising via a perk on a credit card.
Reducing the AF also reduces the profit for Amex. Even assuming that Amex is covering the full cost of the $200 airline fee credit, they are banking on many people not taking full advantage of such a credit. AND, they are still collecting a transaction fee from the airlines on the original purchase. So, in aggregate, a $200 fee credit per account might only cost Amex an average of $175 per account. Whereas reducing the AF by $200 with no travel credit would immediately reduce revenue by $200 per account, period. Yes, they'd get more accounts, and that might make up for it, but they'd also become viewed as more of a mass-market card than they already are. And of course this is but one variable among many.
Re: the Amex/Uber relationship - I'm willing to bet that Amex and Uber are paying each other for that relationship. Amex is paying Uber the fee credits in order to add a "perk" to the card. But Uber is also paying Amex in the form of a significant discount on those credits in order to use Amex as a marketing channel (e.g., Amex reimburses Uber for the ride credits, but perhaps each $15 credit only costs Amex $7.50). At the end of the day, both Amex and Uber are getting paid by the cardholders.