With gas prices soaring, the search for savings has become increasingly urgent. Apps that save money on gasoline may offer some help, but how much help – and for whom – turns out to be far from clear.
One of the big ones is Upside, which was founded in 2015 as a pilot in Washington, DC, by two former Google employees. The app changed its name from GetUpside to Upside last week. The upside is different from traditional loyalty programs you may have encountered because the app uses user data and machine learning to calculate what corresponds to a personal petrol price for each customer instead of offering the same rewards for the same expenses.
It seems to be everywhere. The app’s AI discount technology has been integrated into other gas-saving apps, such as GasBuddy and Checkout 51. And Upside aggressively sought the market for riding shotguns: Both Uber and Lyft added the technology to the apps their drivers use, in a move that companies said would help offset lost revenue due to the high price of gas. Instacart and DoorDash have also offered Upside promotions to their employees.
To date, the company has raised $ 62.6 million, according to Alex Kinnier, Upside’s CEO and co-founder. That funding has come from investors in Silicon Valley and the banking and oil industries.
More than 30,000 companies market offers through the app, and about 30 million users in 48 states and DC have access to its offers, according to the company. Kinnier said the app’s current usage has increased by more than 40 percent month-on-month.
It is obvious that many have turned to Upside to save. What is less clear is exactly how the app has chosen to reward these customers and who earns the most.
When you open the Upside app, it pulls up a map and a list of offers from participating gas stations, restaurants and grocery stores. For each gas station, the app shows you a price per gallon. To be clear, it is not necessarily the price you pay at the pump but rather the effective price after weighing in whatever cashback offer is marketed.
You may also not see your local low-cost gas station in the app, as Upside only works with selected stations.
Once you have found a petrol station to refill, you can “cancel” the offer in the app. You must use a debit or credit card to pay – not cash or EBT. Otherwise, you will not receive the refund reward. Once you have paid the full price quoted at the pump, you can either send in a photo of your receipt or use the “Check in” function. The promotional reward will then be added to your balance in the app.
According to material on Upside’s website, the company and the retailer shared a combination of the cost of the campaign.
You can then withdraw your income to your bank or exchange it for digital gift cards to places like Applebee’s or Amazon. Some of these deals require you to have accumulated at least $ 10 in cashback rewards, and Upside adds a $ 1 fee to charge smaller amounts to your bank and PayPal, so you may need to use the app multiple times to reach the minimum level.
When Ron Walter, a gig worker who runs a blog called EntreCourier, signed up for the Upside app last year, he said it took some time to get used to. While the app says it offers lower petrol prices for Uber and Lyft drivers and up to 25 cents cash back per gallon of fuelhe found these promises somewhat misleading.
“Even if they do not technically say you’ll get that much all the time, it really does look like ‘hey, you can get up to 25 cents off per gallon,'” Walter said. that it is the expectation or that it is the norm. “
Walter said his payback campaigns dropped after he first started using the app. On average, he said, he sees about 7 cents per gallon of cashback rewards, although he sometimes gets up to 12 or 15 cents.
This is because the offers you are ultimately offered are governed by machine learning and data that Upside has collected from you.
In the end, it is unclear who gets the bigger deals and who does not. And the company’s CEO, Kinnier, has said different things in different forums about how the algorithm works.
Kinnier told The Markup in an email from a corporate spokesman in mid-April that the app has earned users a total of $ 200 million in cashback and merchants $ 350 million in “new, incremental” profits. But a large part of how much you can get depends on what data the app collects about your behavior.
Upside comes with discounts for each user based on anonymized data such as customers’ “card numbers, locations, timestamps, ticket sizes and more,” according to company documents.
In addition to data about you, Kinnier told The Markup, other factors, such as nearby gas station sign prices and retailer data, also contribute to promotions. Kinnier said in the April email to The Markup that the entire list of factors used to calculate campaigns offered to people is proprietary and not shared with users.
Some of the advertising material on the app’s website suggests that loyalty to certain gas stations plays a big role – but in the opposite way from what you might expect from a rewards program.
In an undated white paper on the app’s website called “The Power of Personalization: How Does Treating Customers Differently Maximize Profit?” Kinnier wrote that “most loyalty programs cannibalize the merchant’s profits by offering promotions on items that the loyal customer would still buy,” explaining that it is more profitable to offer larger discounts to rare or new customers.
“If your loyal users start using GetUpside and we can not increase their purchases on your site … their offers will go to zero,” said a FAQ previously published on the company’s website. “While we hate losing a user, we are willing to do so if the customer already buys all of their purchases from your business.”
But when The Markup contacted Upside in mid-April, Kinnier had a completely different message. Kinnear said, “Users can always make money back on our participating sites.”
After The Markup asked for further clarification, he replied through a corporate spokesperson that the common questions on the company’s website that say loyal users stop getting discounts were incorrect and that the company would correct it. That has changed since then.
“They say to the gas stations, ‘Do not worry. We will not remove your high paying customers. We will get more price-sensitive customers by adding your business, not deducting it, says Marshall Steinbaum, assistant professor of economics at the University of Utah. “You can basically price discrimination through that mechanism.”
In the end, Upside’s price information is not public, nor is its algorithm, so it is not possible to determine who actually gets offers and who does not.
Upside shares just enough data with its partners to confirm a transaction, so users can get their rewards, Kinnier told The Markup in the email, adding that “each user has a uniquely generated identifier to learn more about their conduct without compromising their Integrity. ” No user information is shared externally, and Upside does not sell data, Kinnier said.
Garphil Julien, a research assistant at the Open Markets Institutes, said it seems that Upside could do with its personal campaigns is to charge customers the highest price they are willing to pay. Previously, he said, this was “pretty much impossible” to accomplish, but “the advent of harvesting more user data and using AI with this data has helped companies get pretty close to achieving this.” This can mean that companies use information about customers that the customers themselves do not know.
The way Upside makes money is through profit-sharing agreements with traders, Kinnier told The Markup. “When we give them a customer or a purchase they did not expect (and prove it!), Then we share together the profit earned on the purchase,” he said in the email in mid-April. “Users get money back for choosing that business, and companies get more profit. It’s a win-win and GetUpside does not get paid until both make money first.”
Right now, the company is not profitable, Kinnier said.