New Recursive Merchant Funded Offer From Chase And Lyft

I’ve written about merchant-funded offers extensively. In the most common form readers are likely to be familiar with, a brand that wants to reach high value customers offers a free trial or credit to a premium credit card that has access to those customers.

  • The brand benefits by reaching and incentivizing the customers they want
  • The card issuer benefits by looking like they’re providing value to their cardmembers

Both things are true! And the specifics of the deal may vary. Sometimes the benefit costs the card issuer nothing. Something they’re even paid by the brand for the marketing. And sometimes the issuer is kicking in part of the cost.

We’ve seen American Express load up on merchant-funded offers to show substantial cash value to cardmembers, while raising annual fees. We’ve seen Chase do the same – think DoorDash and Lyft right before the pandemic, while announcing a fee increase on the Sapphire Reserve card.

These offers can be hard to make last. Eventually the brand reaches as many customers as they are likely to reach, and no longer benefits from offering continued discounts. So issuers need a funnel of new offers to replace the ones they lose.

And the offers are a competitive space, too. Chase needs Lyft and DoorDash since American Express has Uber (both rides and Eats).

When the Sapphire Reserve offer came out with Lyft, it included Lyft Pink. That included 15% off all rides; priority on airport pickups; 3 free cancels a month and no lost and found fees.

Lyft has changed its Pink program. It’s no longer as valuable, but has two tiers. Sapphire Reserve now comes with the more premium tier for two years. And it appears to, itself, be loaded with merchant-funded offers. It’s a recursive merchant-funded offer!

  • Free Priority pickup upgrades
  • 10% off Lux rides
  • 3 free cancels per yar
  • roadside assistance for your own car, free up to four times a year (Chase already has this)
  • Grubhub+ for one year
  • SIXT car rental upgrades
  • Free unlimited 45-minute classic bike rides (after 45 minutes you pay…)
  • Discounted e-bike and scooter rates plus 3 bike or scooter guest passes per year

Lyft has a subscription plan that’s barely about on-demand rides – it’s bundling roadside assistance for when you aren’t riding with Lyft; Grubhub+ (which broadens Chase’s meal delivery partnership by extension); SIXT; and e-bikes and scooters.

I don’t especially see value in Lyft Pink All Access, the way I did in a simple 15% discount on Lyft rides. However there is still a big benefit in the Chase-Lyft partnership for Sapphire Reserve cardmembers: 10x points-earning with Lyft through March 2025. With the demise of Uber’s loyalty program, this makes me want to ride with Lyft instead.

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