What’s a loyalty program?

A loyalty program is a collection of offers to third party products and services – kind of like a coupon catalog – that work platforms promote to ICs to help them work more efficiently (to save money or time, get new clients, be more productive, etc.). 

The exact offers usually depend on the type of work that occurs on the platform. For example, Lyft negotiates discounts to products and services that help their drivers save money on vehicle-related expenses (like gas, cleaning products, auto parts, etc.). Patreon negotiates discounts for goods and services that creators and artists need, like community building softwares and studio recording equipment.

In terms of how ICs access the offers in a loyalty program, it varies. Platforms like Uber and Wag! make their rewards available in their app. Platforms like Upwork and Fiverr may send emails which direct workers to a web-based directory. Some platforms will do both! Platforms that have a more mobile workforce (like rideshare drivers or dog walkers) deliver offers primarily in-app, and platforms with ICs who mostly work from one location (like creators or online sellers) tend to deliver offers via a web-based portal. Example of both are below:

Additionally, some work platforms have tiered loyalty programs, which provide better discounted offers to the most active tiers of ICs. For example, Uber Blue drivers (entry level) get 20% off roadside assistance from Urgently, whereas Uber Diamond drivers (top tier) get the same service from Urgently for free. A tiered loyalty program can be an effective way to motivate ICs to do more work on one platform vs. another similar platform. More on this below…

Loyalty programs table

To give you an idea of what’s out there, we picked some of America's most popular work platforms and highlighted the perks that they offer to their independent contractors (or don’t). 

Why do work platforms have loyalty programs?

Loyalty programs are used by the platform as a low uplift way to compete for labor supply in a competitive and unstable labor market. 

And if you’re comfortable living the independent contractor lifestyle or even just doing it as a side hustle, you have a lot of platforms to choose to do your work on… 

For example, rideshare/delivery ICs can choose to driver for Uber, Lyft, Walmart Spark, Doordash, Shipt, Amazon Flex, Instacart, Grubhub, Drizly, GoPuff, Thistle, and hundreds of other smaller driver platforms. While most gig drivers work on several platforms concurrently – switching over to the one that’s paying the highest rates at that time – a solid loyalty program can be an effective, non-compensatory way to keep drivers driving on your platform more than another competing platform. 

Beyond competing for labor supply, some platforms genuinely care about helping their ICs, and invest time and resources to ensure their loyalty programs are full of meaningful, good-fit offers. Platforms that operate like this retain ICs better than their peers.  

Lastly, some work marketplace platforms, like DoorDash for example, use their loyalty program (in part) as a way to generate additional revenue via revenue-sharing agreements with partners. Depending on the size of the platform’s IC workforce (and how compelling the offer is), a revshare from one partner can drive hundreds of thousands – if not millions – of dollars in passive revenue to the platform. A win-win-win for each party involved (platform + partner + independent contractor).

In this economy, perks matter 

Let’s be real… If you rely on a work marketplace platform for income, you’re working long hours on wages that fluctuate. Millions of ICs in the US are living paycheck-to-paycheck, which means every dollar – earned or saved – matters. 

When a loyalty program is meaningful, it’s doing two things: 

1. Helping ICs save money on products and services that they need to work effectively on the platform (e.g., car wash discounts for drivers, software discounts for creators, shipping discounts for online sellers). 

2. Introducing ICs to products and services that they may not even know they need. For example, if you’re new to 1099 work, you may not know that you’re expected to keep track of your business-related expenses for tax purposes. A thoughtful loyalty program addresses that issue by including expense tracking and/or tax products that are designed for 1099 work. 

5 tips to level-up your loyalty program

1. Negotiate meaningful discounts. Offers under 25% are a waste of time, and so are discounts that only last for a couple months. Show your ICs they matter by negotiating 50% (or higher) discounts with your partners. You have the ICs, so you have the leverage to push partners for better discounts.

2. Align perks to the work. Offers in a loyalty program shouldn’t feel random. They should directly relate to the work that your ICs are doing... Drivers should see vehicle-related discounts, freelance designers should see design and productivity software discounts, etc. 

3. Make it co-branded. You and your partners should work together to make the user experience feel coordinated. Wherever possible, remind your ICs that you, their trusted work platform, negotiated a great discount to *this amazing product* just for them.

4. Make it accessible. Wherever ICs interact with your platform the most – whether that’s in an app, on the web, or both – is where loyalty program offers should be featured. ICs shouldn’t have to remember to go searching for their perks. 

5. Quality over quantity. There might be exceptions, but loyalty programs with 20 or more offers are just noise for the IC. Hone in on <10 exciting offers that you’ve vetted and which demonstrate empathy for your ICs’ needs. 

Conclusion

Independent contractors have a ton of choices for where to do their work. While higher wages will always be the most powerful way to attract and retain labor, not every platform can pay top dollar all the time. A solid loyalty program is a straightforward and low maintenance way to show ICs that you understand them, and that you care about improving their financial and business outcomes.