Lyft Just Ruined My Passenger Referral Strategy

As many of you know, over the past few months I have pretty much stopped driving for Lyft altogether and focused my efforts primarily on Uber.  Whether I drive in OC or LA, I get more requests, I get paid more and the surge always seems to be higher with Uber.  So it doesn’t make much sense to drive for Lyft right now.

I know things are different in other cities, notably the midwest/East Coast where Lyft often surges higher than Uber and requests might be skewed the other way, but this has been my experience out here in Southern California.

The reason why I never swore off Lyft completely though was because I was still making good money from their passenger referral program.  In fact, I know lots of drivers like me who were actually making more from referrals than they were with driving.

Did I Jinx It?

Things were going so well that I even released a podcast detailing everything that I’ve learned in regards to my passenger referral strategy.  I don’t know how many of you ended up using that strategy but I pretty much gave away all my secrets in that podcast.

Related Podcast: My Passenger Referral Strategy Podcast

In case you need the Cliff Notes, during the past few months I tried out all sorts of different techniques and strategies (online and in person) to refer new passengers.  They worked.  I ended up netting over $1,000 in free ride credits on Uber and Lyft in addition to all of the cash bonuses I received with Lyft.  And just in case Lyft and Uber are reading this, I was smart and spread out all my referrals over multiple accounts just in case they tried to pull a fast one on me.

Lyft Slashes Passenger Referral Program

Sometime in the last week of October, Lyft sent out an e-mail to all ambassadors (that’s me) that the AMB program was going to be changed: passenger referral payouts would be dropping from $10 down to $5 and new passenger credits would go from $25 to $10.  Obviously this was a huge blow to my referral strategy since now my pay was effectively going to be cut in half.

I wasn’t so much worried about the new passenger credit dropping because I have always had a hunch that many people save this code instead of using it right away on a short ride ($25 will take you pretty damn far on Lyft).  But I was obviously upset that I had put all this time and effort into a program that was now going to pay me half as much as it used to.  What’s worse is that I had actually just invested money in 1,000 Lyft referral cards and marketing materials.  Now those cards would be effectively useless since they said ‘FREE $25 RIDE’ right there on the front.

Reimbursement From Lyft

Lyft was actually going to cut the program without ANY notice but there was so much backlash from drivers like me that they extended it by a week, and then a few more days after that.  I reached out to Lyft for comment about the situation and they weren’t super apologetic although they did tell me that drivers would be re-imbursed for any marketing materials they purchased on their own.

A few weeks ago I actually got an e-mail from a guy on the Driver Marketing Team at Lyft and believe it or not, I actually ended up getting reimbursed!

So if you would like to try and get reimbursed I suggest you e-mail and ask for your reimbursement.  This obviously doesn’t make up for all the time and effort I put into my passenger referral strategy but it is better than nothing.

(Please let me know in the comments if you end up getting reimbursed or not, I hope that I’m not the only one Lyft chooses to reimburses)

Lyft Cuts Passenger Referral Program Completely

I was definitely bummed about the new cuts but a few days later I learned that Lyft actually cut the passenger referral program entirely in most cities across the US (all of the non major markets).

As of today, it looks like most of the major markets like LA, SF and San Diego still have the new reduced program but smaller markets like Charlotte, Salt Lake City and Colorado Springs had their programs cut completely.

Here’s an excerpt of an e-mail I received from a driver in Colorado Springs:

Most recently, one of our best drivers, secured a deal with PPCC’s Student Life Office where they would help promote Lyft by emailing en mass the code “NODUIPPCC” to it’s entire student body, which numbers over 22,000 strong. Backing up this effort was the Alcohol and Drug Awareness program ran by PPCC, which is big on preventing DUIs from happening in the first place.

Within the past two days, we all received an email from Lyft itself stating that the passenger referral program would be effectively suspended, or at best ended, come November 1st. With all due respect, almost every driver I know of in Colorado Springs is very upset over this decision, as it effectively cancels out the agreement done with PPCC, and the agreements that were in the pipeline with UCCS and Colorado College to help promote the brand. Many of us are rightfully angry over this, and it’s not over the bonuses thrown in with what we make each week from each new passenger that uses Lyft, but rather over the fact that we feel at this point that we are effectively barred from advertising on our own.

Please understand that many of us do support Lyft’s focus on community. For many of us who drive, that was one of the reasons why we signed up to become drivers for Lyft in the first place. We believe in the idea of helping to make the communities we live in a better place, and no other company I can name encourages this or even promotes it. But this brings me back to where I started: we’ve been having to do marketing on our own for Lyft in Colorado Springs. With this decision to take that ability away from us, it’s making many drivers either consider giving up driving for good or taking the two hour round trip to the Denver area as the perception among many is that Colorado Springs doesn’t seem to be worth the time further up the chain.

Powerful stuff.  The thing I take most offense to is the lack of notice given to drivers by Lyft.  For a company that purports to be all about ‘community’, that is not something that you would do to a co-worker or friend.

Related Article: Why The Downfall Of Lyft Is Imminent

At this point, I don’t think there’s a lot that Lyft can do to mend things with all the drivers they screwed over.  Like I’ve said in the past, although Lyft purports to be a community based organization, they have continually proven that they are no different than the Uther guys.

As a driver, it’s important that you keep this in mind going forward and the only loyalty you should ever show is to yourself.  Remember, there is no one who cares more about your money and your business than you do.

Passenger Referral Strategy Going Forward

Lyft didn’t actually ruin my passenger referral strategy but they definitely gave it a little set back.  Luckily, there are still a few options if you’d like to go forward with this plan.

Still Worth It With Lyft?

Obviously, if you’re in a city where the passenger referral program was cut, you will no longer be able to promote Lyft.  For everyone else though, rideshare is blowing up right now in the media and there are lots of opportunities for you to talk about your experiences and promote your code.

Look at all the guest posts I was able to do in just a few short months (here, here and here just to name a few).  Obviously, I was able to leverage a lot of my contacts in the personal finance blogging niche but maybe you’re in a similar industry or you know people who have a large audience that would be receptive to helping you sign up new passengers.

Get A $30 Ride Credit With Uber

Uber’s referral system works similar to Lyft in that if you refer a new passenger from your driver account, you’ll get $5 cash and the passenger will get up to $30 off their first ride.  Great deal for the passenger, not so much for you though.  You can make some money getting $5 per referral but I’d rather use my Uber passenger account and get a $30 free ride credit for every person that I refer.

In order to get a $30 free ride credit every time you refer a new passenger you will need to create a separate rider account.  Let me say that again, you cannot use your driver account, you need to create a separate passenger account.  Once you’ve done that, you can even customize your code and now every time you refer a new passenger you’ll get a free $30 ride.

Related Article: How to Customize Your Uber Passenger Referral Code

I take Uber all the time as a passenger so for me this is a great deal.  I would much rather have a $30 ride credit tax free than a $5 cash bonus that I’ll have to pay taxes on.

Here’s a little bit of math for you to think about: if your marginal tax bracket is 30%, you will only receive $3.50 of that $5 cash credit after taxes.  If you end up using all $30 of that free ride credit though that money is tax free and it would have been the same as you earning $43 ($30/.7), paying 30% in taxes and then spending $30 on an Uber ride.  So what would you rather have, $3.50 or $43?

My Biggest Takeaway From Getting Lyft-Shafted

The one take away that I got from this whole fiasco has to do with taking advantage of opportunity.  Opportunities arise all the time but you have to be able to recognize them early in order to get ahead.  I made a lot of money and got a lot of ride credits (probably more than I now know what to do with) using the techniques I talked about but none of that would have come to fruition if I didn’t act on one simple Facebook post.

I actually discovered this whole strategy from a picture posted in the SoCal Driver Lounge almost 4 months ago.  Some guy posted a screenshot of his weekly summary that showed $3-400 in bonuses.  A lot of people questioned him and said he was full of sh&^ but I figured it was at least worth a shot.  So I checked things out.

He ended up starting a little Facebook group (Thanks Socal Rob!) for like minded thinkers and the rest was history.  I’m not saying every post or every picture is an opportunity but smart drivers have to be able to spot a good opportunity and act quickly.  Once other people start to realize the benefit of something like a passenger referral strategy, the market is going to get saturated and you’ll no longer have that edge.  I share everything I learn with you guys because for me it’s all about the challenge of finding that next hustle.

What is going to be my next ‘passenger referral strategy’ and what is going to be my edge?  Rideshare driving is getting more saturated by the day but in my eyes there is more opportunity than ever, you just need to know where to find it.

By the way, if you still haven’t taken a ride with Uber yet, use the code ‘uberRideshareguy‘ and get $30 off your first ride.  I know there are lots of drivers out there who haven’t taken a ride yet but my number one piece of advice to new drivers is to experience things from the passenger side!  You will learn more than I can ever teach you by seeing what other drivers do well and more often what they don’t do well.  

Readers, what do you think about the way Lyft handled cutting and slashing the passenger referral system?  Does it make you feel like a member of their community or do you equate them with any other big corporation?

-The Rideshare Guy