Lyft’s New Referral Program is Beating the Competition

Lyft is rolling out a new driver referral program that should make it easier for current drivers to refer new drivers, and keep them! This program will incentivize new drivers to stay on the road by paying them immediately – and paying the referring driver as well. Today, senior RSG contributor Christian Perea covers this new program, how it differs from Lyft’s previous program – and how it’s beating the rideshare competition. 

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Lyft recently changed its driver referral program by switching to a bonus that pays out on a per-ride basis. If you signup to become a Lyft driver using another driver’s link, then both parties will receive a small payout for each ride the new driver completes.

Lyft’s new driver referral program contrasts with their previous structure where the bonus wouldn’t be rewarded until the new driver completed a certain number of rides (usually between 50 and 100 rides). This is important because it means that drivers and those who refer them can start earning a bonus payout from the first ride.

Lyft's new driver referral program is designed to make it easier to get new drivers on the road and keep them driving - how does it benefit current drivers?

Lyft’s Driver Referral Codes: A Trickle Charge

If you are new to driving, then you should really consider signing up because their bonus program is definitely better than the competition’s right now. Not only is Lyft still paying pretty big signup bonuses overall, but their new program makes sure the driver begins to earn a bonus from their very first ride.

Lyft Bonus In San Francisco

If you signup using a driver’s link, then Lyft will add some extra money to every ride you do. For example, San Francisco’s sign on bonus is an extra $1.89/ride with a cap of $800 over 60 days. Whoever refers the new driver will also get $1.89/ride that the new driver does.

Related: Share your referral code with new drivers with a personalized business card

How Does This Compare To The Old Way?

Looking at it from a $/ride standpoint, the new scheme is actually less than the previous bonus setup. Previously, the bonus for San Francisco was $350 after completing 100 rides within 30 days. This came out to an extra $3.50 per ride after the driver successfully hit their 100 rides. Most of Lyft’s bonus setups throughout the US were similar: Do a X number of rides within 30 days, and get one bonus.

Whereas this new setup only rewards $1.89/ride. Drivers would have to do 189 rides to reach the same 350. Getting the full $800 would mean doing 424 rides within 60 days of activation! So it definitely seems like less on a $/ride basis. However, I still think this bonus program will work out better for those who refer drivers.

The New Program Is More Egalitarian

The 100 rides for $$$ program always felt a bit like it was setting drivers up for failure. According to our 2017 Driver Survey, 49.5% of drivers are on the road less than 20 hours a week. This new program opens bonus payouts up to that part of the driver population and it probably does a better job of making sure drivers don’t just drive for a month, get burned by Lyft, and swear to never drive again.

I actually like this set up a lot more because whenever I’ve tried to refer drivers, I’ve been burned by them not hitting their ride count in time. The new “trickle” charge set up seems a bit more fair in that regard, because the reward is based on how many rides a new driver gives. Most new drivers do this part-time, and doing a large number of rides is difficult. In the past, it seemed that only full-time drivers would end up hitting the bonus.

Out of the 7 people I have referred to drive for Lyft, only 1 driver ever hit the ride threshold (I don’t refer many drivers). The rest didn’t because they were part-time drivers and weren’t motivated to drive a lot because they had other commitments, even though 3 of the 7 eventually became drivers and many gave a decent number of rides.

Lyft’s “Other” Bonus: Still All or Nothing

Lyft also still offers a lump-sum bonus on their website and in online marketing ads where a driver will receive all of the money at the end of completing a certain number of trips by a certain time period. Using San Francisco as an example again, clicking on one of their paid Google ads shows a driver can earn a $1,000 signup bonus. However, the driver must complete 500 rides within 60 days of becoming activated!

Lyft Bonus San Francisco

At first it seems like a better deal, but it’s actually much more risky. A new driver won’t get anything if they don’t hit 500 rides in 60 days, even if they hit 499 rides. It takes about 164 hours to get to 500 rides in San Francisco. That assumes you get 3 rides every hour and drive 40 hour a week for 4.2 weeks.

This seems kind of shady because this bonus is obviously competing with driver bonuses, and it leaves the new referral with nothing unless they complete 500 rides (and very few will reach 500 rides).

These Are The Best Bonuses Right Now

This is actually pretty aggressive for Lyft and I think the new setup is clearly better than Uber’s “Earnings Guarantees”, which only guarantee a new driver will earn a certain amount over a period of time. Most of those guarantees are pretty low/conservative and are actually just whatever the average earnings are for 100 rides. The most “extra” money a new driver would get from Uber would be maybe $200.

Related: Stay up to date on all the latest bonus information here

I think a lot of the drivers in the past who hit the signup bonus at 100 rides got into driving to do it full-time. Meaning they still did a lot of rides even after earning their bonus. These full-time drivers are pretty likely to do the extra rides required to reach the $800 bonus, especially since it is stretched over 60 days instead of 30. This ends up meaning that both sides earn more money than they would have with the original bonus.

Meanwhile, those who don’t do 100 rides in 30 days will still earn a decent bonus. Most of the drivers I’ve signed up fall into this category, and previously neither of us would earn a bonus since they couldn’t hit the 100 rides in 30 days. Now all of those referrals will be generating bonus money as well – for the referrer and the new driver.

Drivers, what do you think of Lyft’s new referral program? Do you think it will help keep drivers motivated and on the road? If you haven’t signed up to drive for Lyft yet, now is a good time! Click here to sign up using our affiliate link.

-Christian @ RSG