Lyft's 'Taco Mode' drives 3% more late-night visits to Taco Bell

Brief:

Taco Bell, the Mexican-food chain with 7,000 restaurants in the U.S., saw an 8% increase in weekend customer visits during the 11 p.m. hour after partnering with ride-hailing company Lyft to let passengers request a stop at a restaurant drive-through, new data from mobile tracking firm PlaceIQ shows. The lift is in comparison to the average of previous 11 p.m. weekend hours.
Overall, there was 3% increase in visits to Taco Bells in the promotion area during the late July weekend it was in effect. Taco Bell said it was testing Taco Mode for two weeks in at a location in Newport Beach, CA, with plans to expand the program nationally in 2018.
PlaceIQ also found that, unlike other fast-food chains, Taco Bell gets gradually more busy throughout the day. The chain gets the largest share of daily foot traffic from 9 p.m. to 2 a.m. Taco Bell receives nearly 20% of all late-night fast food visits nationally.

Insight:

PlaceIQ’s analysis suggests that Taco Bell’s partnership with Lyft to drive late-night traffic to its restaurants had a positive effect. The Mexican food chain clearly is in touch with its customer base of younger adults with late-night munchies (the companies don’t mention the likelihood that alcohol is also involved). Millennials are more likely to use a ride-hailing app when going out at night than for any other occasion, according to a consumer study last month by LRW and Lyft. About one in four consumers use ride-hailing apps, and do so multiple times a month, citing the No. 1 reason as convenience, according to a report from market researcher Mintel cited by Lyft.

PlaceIQ's analysis showed the largest spikes in traffic occurred at 9 p.m. and 11 p.m. Foursquare data show that about 15% of Taco Bell's customers visit between 10 p.m. and 4 a.m., QSR Magazine reported in October. Late-night diners made up 11% of McDonald's customers, 10.5% for Wendy’s and 3.5% of Qdoba's customers.

Taco Bell has partnered with popular mobile apps in the past so a repeat of the strategy suggests the brand found some measure of success. Last fall, a Taco Bell restaurant was transformed into an Airbnb for one night. This week, Taco Bell opened up table reservations for consumers to test its new fried egg taco. PlaceIQ's data shows breakfast hours are the chain's weakest time of day for traffic, suggesting the new menu item is an attempt to attract more early morning customers.