Starbucks Teams Up With Lyft to Boost Loyalty Program

Starbucks Corp. is teaming up with ride-sharing service Lyft Inc. in the coffee giant's newest effort to expand its loyalty program beyond its cafes.

Under the deal, riders and drivers who use Lyft's mobile app, which facilitates carpooling, will be able to earn Starbucks loyalty "stars," which can be redeemed for food and drinks at Starbucks outlets.

Starbucks didn't disclose the terms of the deal, but said Lyft purchased "stars" from Starbucks. Details of how Lyft drivers and passengers will earn rewards are being worked out, with plans to debut the program later this year.

Expanding the use of the Starbucks points program is a key growth initiative for Chief Executive Howard Schultz, who hopes it will both attract new customers and enhance the loyalty of existing ones. In May, for example, the coffee giant announced plans to team up with music-streaming service Spotify, whose subscribers will be able to earn Starbucks stars.

Starbucks also is pressing other digital initiatives to fuel growth, such as offering customers in several markets the chance to order and pay for purchases using mobile devices.

That mobile system, now available in 4,000 Starbucks stores, will be integrated into a delivery program that the company plans to test later this year. Mr. Schultz said there might be an opportunity to use Lyft's network of drivers to enable delivery of Starbucks coffee.

Mr. Schultz said 20% of purchases at Starbucks stores around the world are now made using a mobile device and that digital initiatives "have become a driving catalytic engine in our company."

Lyft drivers will have the option to immediately earn gold status in Starbucks's loyalty program—a level that can normally take months to achieve. Lyft drivers also will be able to receive Starbucks eGifts from customers wishing to thank their driver.

Write to Julie Jargon at [e-mail]

Access Investor Kit for Starbucks Corp.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US8552441094

Subscribe to WSJ: http://online.wsj.com?mod=djnwires