Uber Referral Program Case Study

June 16, 2022

Uber’s referral program is among the most well-known and often-referenced programs in the business world. The company did not slack at harnessing the power of referrals to achieve tremendous growth and success.

In this post, we’ll discuss how the Uber referral program worked both for riders and drivers, why it proved so successful, and some of the things the company could have done to make it more attractive.

How does the program work?

Uber has two separate referral programs for riders and drivers.

Uber referral program

For riders, once you sign up for an Uber account, you receive cash credits that can be enjoyed on your first set of rides. In addition, riders receive a unique referral code for referring their friends to sign up for an Uber account. Once that person uses your referral code, both of you receive Uber credit rewards.

For drivers, once you sign up to drive with Uber, you are eligible to earn bonuses as long as the person you referred completes a certain number of trips. At one point, the rewards for referring drivers were determined by the referral’s status. Thus Uber drivers could earn up to $500 if the driver they referred to signed up with their own car. If they referred a driver who signed up with a rental car, they could earn as much as $1750.

Rewards were automatically added to either driver or rider accounts after their referred friend completes their first specified number of trips and meets the requirements of the offer.

Both riders and drivers were eligible for one referral reward per individual.

What are the good things about the program?

Uber’s referral program for both riders and drivers was so successful because of several factors. When the app started its referral program, it first offered a $10 dual-sided incentive redeemed in Uber credits. It later upgraded it to $20 and $30 dual-sided Uber credit rewards. While Uber has halted its referral program as of this writing, there are still valuable lessons to learn on why it worked so well. Here are some of the great things about the program:

Uber referral program

Ease of Access

One of the key characteristics of a good referral program is its ability to be easily accessed by customers. Uber did a great job by making the referral program easily accessible to all its riders and drivers in their apps. Riders could tap on the “free rides” button in the app’s menu to access the referral program. Again, the concept of using “free rides” as the program’s call-to-action rather than the usual “refer a friend” was an excellent move by the company. Riders were easily enticed by getting free rides and would tap to refer their friends so they can enjoy free rides.

Dual-sided incentives

Another great thing about Uber’s referral program was that both the referring customer and their referrals could earn rewards. The program was designed so that when the referred friend rides for the first time with Uber, the rider who referred them instantly receives Uber credit equivalent to a free ride. At the same time, the referred friend enjoys free ride credits spread across their first number of rides. This dual-sided approach served as a great motivator to urge riders to keep referring friends to enjoy the experience. Since both parties view it as a win-win situation, they become more loyal to the brand, and the referral cycle continues.

Uber referral program

Mobile-friendly Program

A vital advantage of the Uber referral program was how mobile-friendly it was. Since Uber is fully app-based, the referral program was easy to manage as well. Sending a referral was as easy as tapping a few buttons on one’s mobile phone. Again, the app provided several sharing options which could also be easily managed on any mobile phone. Customers could share their referral codes via email, SMS, social media platforms such as Facebook or Twitter, or copying and pasting them to share directly. The mobile-centric nature combined with the multiple sharing options made promoting the referral program highly convenient.

Separate referral program interfaces

While Uber incorporated a referral program for both their riders and drivers, the company employed a tactful strategy by providing separate interfaces for riders and drivers. Each of these interfaces was tailored to the needs of the two distinct customers. Thus each customer was given a unique referral code. Riders and their referrals earned Uber credits, while drivers also had the opportunity to earn bonus rewards when they successfully referred another driver. The driver referral program was also dual-sided. Hence, drivers could earn as much as a $300 bonus, and at a point, as much as $1,500 while the new driver earned a $500 bonus. Thus, the Uber referral program was highly beneficial to riders, drivers, and all new customers from all angles.

How could they have made their rewards program more attractive?

Undoubtedly, Uber’s referral program was a no-brainer for its customers. However, like many other referral programs, they could have made few adjustments to make it more attractive to customers.

The most notable would be the complexity of their driver referral program. While Uber’s driver referral program offered attractive incentives to drivers who referred new drivers, the program became complicated with the introduction of certain requirements. These requirements classified the incentives based on the status of the referred driver. Although generally, the company stated that drivers could earn up to $1,500 in cash bonuses for referrals, the amount earned was largely dependent on the new driver’s status. So, for referring new drivers who rent cars from LCR, drivers could earn between $500 and $1500 in bonus rewards, depending on how long they had been renting with the company.

Uber referral program

Meanwhile, if a driver referred another driver using their own car or other rental company, the rewards were usually $200. On the other hand, the newly-referred friend could earn way more rewards in their first month. While this arrangement seemed fair and transparent on the surface, it complicated a straightforward referral program and demotivated a section of drivers from referring more new drivers. Uber could have made the program more attractive by simplifying the program and leveling the rewards for drivers who signed up with their own cars.

Wrapping Up

Uber’s referral program achieved tremendous success due to its excellent product, dual-sided rewards, easy accessibility, and high value. Though the company may have halted it for a future revamp, it remains an exemplary referral program for businesses to emulate.

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