How did Uber manage to use its referral system to expand to 50+ countries?

Uber is the largest ride sharing service in the world and the way it got there is by offering a service that everyone needed. We all like the idea of not spending a lot of money on taxis. So when there was an opportunity for people to spend less on taxis, Uber went on it and they created a massive, downright impressive service that’s now used in more than 50 countries all over the world.

That being said, one of the primary reasons why this service managed to become so popular is its referral system. If you want people to enjoy your service, you need to encourage them or provide them with some sort of bonuses. When you do that it will be a lot easier to acquire the attention you want customers will be more excited to work with you, which is what you really need in the end.

The tricky with Uber is that it’s a very powerful company right now, but right from the beginning they always strived to make things a bit different. They didn’t rely on promotion on TV or any other channels that required a lot of money. And instead they thought it would be a whole lot better to just focus on the matter at hand and actively figure out what you need to do and what you can expect in the end. The benefit is that Uber makes everything a whole lot easier for you and also for the people referred by you to enjoy a service without any issues.

How does Uber stand out and helps bring in more referrals?

Obviously there are lots of alternatives to using Uber, such as walking, carpooling, public transportation and so on. When there are so many options here it’s really easy to see why people would think twice before using an option that might not be the cheapest one for them anyway.

That’s why the referral system from Uber makes a lot of sense. They are offering a free ride that can be worth up to $20. This is provided to the referrer and for the successful referral. So if you want a free ride you just have to refer someone else you know. Once they create an account and see how convenient the entire system really is, they are bound to become a customer anyway. And that’s why Uber’s approach makes a lot of sense.

It costs a lot of money to acquire new customers nowadays. Companies spend millions to capture the attention of new customers, and having such an approach makes a lot of sense for Uber since they don’t want to spend a lot of money. The overall experience is great and things end up being a whole lot better and easier in the end. Yes it’s super challenging to promote your business and also show people that it can provide them with a great result.

But when new users get to test the service for free and save money, they immediately jump on the opportunity. And then they just continue using that service again and again, accessing exactly what they need and so much more in a meaningful and powerful manner. It’s a wonderful opportunity and something that has the potential to pay off very well in the end.

Then there’s also the fact that a free ride is great as long as the person in question has someone that knows how to use the service to begin with. This really helps a lot and it brings in front the value and support you need. It certainly works exactly the way you want and the sheer fact that someone who already uses the service can introduce a newcomer is extremely helpful. You can stay away from potential problems and challenges, and it’s just a simple way to tackle the referral system.

People rarely try out new things without incentives

We are creatures of habit. And when we see that a service is offering just about all we need, we rarely move on to something else. That’s why it can be hard for a new company to gain your attention. Offering you a free way to test their new service is a very good idea, and it has the potential to help a lot. Of course, you will get a free ride yourself if you convince people to try this out, so you can easily acquire lots of free rides if you introduce a lot of people.

The customer lifetime value and customer acquisition costs are super important for Uber. Sure, in the beginning offering $20 worth of value for a new customer might seem like a lot. But most of those persons that create a new account will see the value in this service and they will use it again and again. What that means is they get to save a lot of money to the point where it’s a lot better and easier to just focus on getting a free ride instead of worrying about any potential loss.

According to Uber, the average customer will spend $95 per month and around 25% of that fee is theirs to keep. So they will cover the acquisition costs in the first few months. The rest is theirs to keep. And then they might be able to retain that customer for years to come. Which means it actually makes a lot of sense to use a referral system the way Uber did. It still delivers a great value for the money and they don’t really spend that much on that initial investment either.

There will be people that try the service but they will not come back to it. But most people will try this a few times and even become a regular customer, so Uber will at least get their money back, if not gain quite a bit of profit from almost every customer. That’s why a referral system like this can bring in some resounding benefits and it has the potential to do wonders all the time. Yes, it’s obviously tricky to handle this type of thing, but with the right approach results can be more than ok.

It helps the riders too

Riders will have a great experience here too, because the more Uber referral customers come, the better it will be for them. Obviously Uber needs customers in order for the system to work. And lots of people will start becoming riders for the system if they get paid well. It really works the way you want and you will be quite happy with the experience and the entire process.

What makes Uber unique is the fact that they are actively understanding the role that drivers play in the Uber network. That’s why Uber rewards new drivers and new clients too, because these incentives and rewards are bringing in more focus on using the platform and using it in the best possible manner. It’s always a good idea to provide both customers and riders with the best approach, as that’s what really helps the business grow.

In fact, in some cities (the larger ones in the US and other countries), Uber will provide $200 or so for a rider referral. Yes, it’s easy to say that drivers will earn quite a lot of money but it’s something else entirely for a brand to put their money where their mouth is and bring in such a bonus for signing up. It’s one of the best options you have to consider and with the right approach it does have the potential to pay off a lot.

Is the Uber referral program open to abuse?

When we are talking about such bonuses, we can expect some people to take advantage of them. This is how our society works and for the most part people will try to take advantage of things if they are not designed adequately. The Uber referral system is quite impressive because it manages to focus on offering people value while also removing any abusers if they appear.

The referral program is created with the idea that the bonus will not get paid unless that new driver will not complete more than 25 rides in their first 30 days. This basically means that Uber will get most if not all of the money back so it’s easy to reward the driver. Using this system also means that they step away from a potential abuse that some people will try to focus on. It will be a lot easier to just complete those rides instead of trying to find a loophole. It makes a lot of sense to check it out and the results on their own can be nothing short of extraordinary.

This also shows Uber if the person in question is actually going to be a valuable asset for the company or not. If the driver just completes a few rides he will not get the bonus, and the company will still charge their fee. So the results are great for their business either way and there aren’t that many challenges or problems that might appear with the idea of undermining that experience and offering a lower class result.

Personalized referral codes make the experience better and more comprehensive

Another thing that Uber does very well is that it personalizes the referral codes. What that means is that customers have their own voice basically. Uber does a good job here because the referral states the user name and it brings personality on its own, something that doesn’t really happen all the time. Referrers are getting a great experience, they see that the current users are respected so it’s a lot easier for them to embark in this journey and that on its own can be a very enticing and exciting experience. It’s all about understanding the potential of that platform and custom referral codes certainly do the trick.

Not only that, but users that want to customize their referral code do that. The experience is great because you get to check out new stuff all the time and you can enjoy the experience all the same. It’s always a good idea to take your time and actively focus on having the best results and experience regardless of what happen.

Plus, by creating a custom code, the referral gets to show that new person their info will be safe. Data loss and theft are huge problems right now, so having a way to steer away from those problems does indeed matter a lot. That doesn’t mean it will disappear all the time, but with the right approach it will be solvable a lot easier. Is it going to be a challenge? Of course, there are obvious problems that can and might appear. But understanding the way the platform works from someone you know does help ease the pressure a little bit. You will know what the platform is about and then you can focus on finding a better and much more valuable experience.

Can other companies implement such a referral system?

Of course, Uber can be a great example of how you can make referrals work. Obviously it might not work for every company out there. But you have to make the offer appealing enough so people will actually care and they will start enjoying the process and experience a whole lot more. The idea here is that once you implement this you have to provide customers with those bonuses and then encourage them to share the offer with others.

More often than not people will do that because they get something in return. Uber would not be as popular without such a system. So it actually makes a lot of sense to use a referral system like this if you are willing to get past any mishaps. It might be quite the challenge to create a system that’s not identical to Uber’s, but try to be creative. You might not have to share financial benefits, maybe some in-app or in-service bonuses can be just as appealing!

7 Response to "How did Uber manage to use its referral system to expand to 50+ countries?"

  1. Comment From Marisa Caro

    Oh, now I know



  2. Comment From Kori Barret

    Great job!



  3. Comment From Jennifer Dorris

    I’ve been reading your blog for 2 years already and you have helped me a lot!



  4. Comment From Hiram Roderick

    Great software, great blog, great support, what else can I ask for?



  5. Comment From Bruno Fishman

    Nice, interesting and very informative.



  6. Comment From Inez Zubizarreta

    I like your content.



  7. Comment From Moira Donnor

    Informative an at the same time good to read.



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