How Well Did Lyft Drive Taco Bell Ride-Throughs?

During the 11pm hour, Taco Bell saw an 8 percent increase in visitors on average, says Drew Breunig, PlaceIQ SVP of Strategy.

On average, Taco Bell’s early August promotion with Lyft to offer ride-hail customers “taco pit stops” drove an 8 percent increase in visitors, particularly during the 11pm hour that is popular with college students and Millennials, data from PlaceIQ shows.

The “Taco Mode” program between Lyft and Taco Bell was announced at the end of July. The promotion was offered via an in-app option for Lyft passengers who might be “seeking the ultimate Taco Bell experience.” In other words, people on the way to a destination with Lyft could stop off for a Taco Bell order, which included a free Doritos Locos Taco, while en route to a pre-determined location.

Lyft drivers were not required to participate, and could choose to opt-in if they wanted. The initiative was tested at Taco Bells in Orange County, CA., between July 27-30 and August 3-6, 2017, during the hours of 9 PM and 2 AM.

The plan was to gather and evaluate feedback from both drivers and passengers and then use that info as the basis for any further expansion into additional markets by year’s end. At the outset of the program, Taco Bell has been planning for a nationwide rollout of the Taco Mode ride-hailing feature in 2018.

Geo-data specialist PlaceIQ offered a few of its own insights as to how the limited program performed. Key findings from its study:

  • The Taco Bell/Lyft promotion was successful in “driving” visitation to Taco Bell locations
  • The largest visitation spikes occurred at the 9pm and 11pm hours, when compared to the average of previous weekends
  • During the 11pm hour, Taco Bell saw an 8 percent increase in visitors when compared to the average of previous 11pm weekend hours
  • During the weekend of the promotion, there was an overall 3 percent increase in visitation to Taco Bells in the promotion area, during late night hours
  • Taco Bell gets gradually more busy throughout the day
  • Taco Bell gets the largest share of its’ daily foot traffic in the 9pm - 2am timeframe
  • Taco Bell receives nearly 20 percent of all late night Fast Food visits nationally and sees 13 percent of their daily visitors during their late-night
  • In contrast, McDonald’s has 75 percent of share of visit (SOV) for breakfast. Meaning, of people seen at major restaurant chains during breakfast time, 75 percent of visits are made to a McDonald’s. (Although McDonalds has 75 percent of all breakfast traffic it only makes up 22 percent of their daily visitors.)
A Lyft ride decked out in ‘Taco Mode.’

To get a sense of how Taco Bell’s ride-hailing alliance actually performed, we checked in with Drew Breunig, PlaceIQ’s SVP of Strategy, to discuss how the geo-data specialist’s LandMark analytics tool connected the taco points between Lyft pickups and dropoffs.

In terms of background, LandMark is meant to better position PlaceIQ more squarely within the attribution wars currently being waged by location-based platforms and insights providers. PlaceIQ launched LandMark at the end of last year to complement its existing tools, such as the Place Visit Rate (PVR), which provides “a real-world KPI” that measures in-store ROI.

As PlaceIQ CEO Duncan McCall has described it, LandMark can help narrow a brand’s focus on customers it can reach more easily, as well as striking deals with related hospitality and on-demand services (e.g., Lyft).

GeoMarketing: It’s clear that the Lyft promotion help “lift” Taco Bell visits, particularly during its “prime time” hours of 9-11pm. Does this mean that these kinds of special digital promotions can amplify a business’s successful periods, but is not as good as driving visits during times when it tends not to be busiest?

Drew Breunig: This promotion had a great deal of success in late night hours, which may have been due to the nature of the timeframe. Our data shows customers are more flexible when it comes to making dining decisions, which makes sense, because their schedules are likely less rigid compared to breakfast or lunch.

Taco Bell could easily apply location-based insights to devise marketing programs to boost visitation at any other time of day, however. Location data can help QSR brands understand where competitors are most vulnerable on a DMA-by-DMA level, which can inform where to first rollout similar promotions or new menu additions first.

As “Taco Mode” is rolled out to other cities, is there anything that Lyft and Taco Bell should fine tune or focus on when it comes to the promotion?

One idea would be to look at the distribution of nightlife in particular cities. In some cases, nightlife clusters around very specific spots, while in others, it is distributed. If potential dining customers are concentrated at specific nightlife destinations, they can focus on driving traffic to specific Taco Bell locations.

Source: PlaceIQ

As they roll the promotion out to other cities, another step could be to first understand the areas where other chain restaurants are doing well in late night. In that scenario, they could invest more heavily in advertising the promotion in areas with the most potential to acquire loyalists from other brands.

Generally, it’s safe to assume that Lyft rides are about getting from one point to another. Does this promotion suggest that these kinds of arrangements could be expanded more permanently. After all, if a person is looking for a later meal, it’s likely they’ll want to go pick up some fast food and this could direct them from one brand’s franchise to another. Or does this work because it’s a special promotion and should remain limited?

It would be interesting to look at the ratio in which they influenced visitation among both incidental and habitual customers. If they are converting habitual customers (those who would have visited Taco Bells anyway), it would make sense to do occasional campaigns like this. If you’re acquiring incidental customers (those who are new and don’t have strict loyalty to your brand), it would make sense for this to be an “always-on” campaign to get new customers into stores.