Who's Julie?

At a brunch gathering of women in technology last year, an attendee I'd just met was raving about Hotel Tonight, an app for getting hotels cheap at the last minute. Because I expressed interest, she emailed her promo code to me afterwards, saying we'd both get $25 when I booked my first room. I later passed my own promo code on to three other friends and made $75 more in Hotel Tonight credits. I thought I had done pretty well for myself: $100 in free money.

But I'm a total amateur compared to those who have mastered the dark art of promo code promotion. Lots of start-ups dangle the codes to incentivize users to spread the word about their products to family and friends, rewarding them with a virtual Jackson for each member of their network that comes on board. Enterprising users, however, have made tens of thousands of dollars in credits by hustling, scamming, and spamming to get themselves free stays and free rides from start-ups desperate for new users.

Celebs like Lindsay Lohan and Neil Patrick Harris have tweeted their Uber codes to millions of their fans to rack up credits. Coupon sites are full of random people's promo codes. Bloggers on parenting sites and financial forums offer up Airbnb, Uber, Sidecar and Lyft deals, often without disclosing that they will also benefit from every sign-up. One mommy blogger whose post on a parenting site made no mention of the benefits she would receive told me she's gotten $1,000 in Airbnb credit, with another $2,000 pending if the 76 people who used her code to sign up actually book a stay in someone's home.

Others are far more creative. People who have never dabbled in fraud have stuck toes in the water to take advantage of the deals offered by growth-hungry companies like Uber, which has used an unknown amount of¬†its¬†$3 billion¬†in venture funding to offer free rides to attract users. Natalie*, a grad student in New York, found out about a $50 Uber promo from her brother during Christmas vacation last year. "Always one for a good deal, I then created two more Uber accounts using another email address of mine and various phone numbers ‚ÄĒ my Google voice number, my mom's cell phone number," she told me by email. "At one point I had 4 accounts up and running. I used variations of my real name when signing up [because] creating fake names [seemed like]¬†a bad idea. As the daughter of lawyers, I figured I shouldn't push my luck in case any kind of repercussions did come to light."

Other dark art promo code opportunists realized they could instead use Burner ‚ÄĒ an app that provides temporary phone numbers ‚ÄĒ to create¬†multiple "first-time user"¬†accounts. It was an obvious deal: Each $1.99¬†disposable number¬†let¬†them get $20 or more in credits from companies like Uber and Lyft. The ride companies now require¬†credit card numbers to start an account making this scheme harder. Natalie¬†eventually got busted because¬†her credit card was¬†linked to multiple accounts; Uber told her to stop or risk being booted from the platform.

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Blake Jareds, a 24-year-old who works for a real estate start-up in New York, racked up $50,000 in Uber credits over just four months at the beginning of this year. Hundreds of people were using his code to sign up every day, resulting in a waterfall of $20 credits into his account. The notifications from Uber took over his inbox until he created a filter that shunted them to a dedicated folder.

Blake Jareds' inbox during the height of his Uber promo code success

Jareds had previously done promotion for nightclubs so had a long list of email addresses for late-night partying folk who were perfect prey for Uber. Uber lets users personalize their promo codes, even to this day; Jareds made his "Uber$20freeride" so that the link to his invitation page would look like an official promotion. He sent it out to 850 of his friends, family, and random club contacts via Mailchimp, and tons of them took the bait. He also posted the url to Reddit's EFreebies. Thanks to all the clicking, he had "the perfect search engine optimization storm" and the invitation page with his code became one of the top hits when you googled Uber. People who already knew about Uber and were just Googling it to download it would instead go in through his portal for a $20 credit. He was like the troll under the Google bridge, exacting a $20 toll.

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Jareds' Mailchimp email

He had free rides for months and the promise of a lifetime of free Uber. But then he made the mistake of giving a bad driver a one-star rating. "Uber looks at all 1-star review rides," Jared told me by phone. "They looked at my account, saw the abnormally high balance and then investigated."

An Uber community manager determined that Jareds' method of spreading his code ‚ÄĒ particularly posting it to Reddit ‚ÄĒ violated Uber's "referral practice" as spelled out in the service's FAQ, and took his balance down to $0.¬†After Jareds shared his story of loss¬†with Business Insider in April, Uber credited him $500. Other start-ups approached him asking for¬†help promoting their apps, and promised they would let him keep the credits, but he says they 'didn't strike him as good apps.'¬†"Then over the summer, my Uber account started creeping up again to the low thousands," says Jareds. "People were still using the code."

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He was back to riding for free until multiple $200+ rides from Manhattan to Montauk caused his account to be flagged again. In August, Uber took away his promo code, forced him to start a new account, and said they would be watching it closely. (Since then, a woman named Julie has snagged Uber$20freeride as her code.) Jareds has since tried to take advantage of a Bonobos offer of $50 credit for bringing in new users, but says it's harder to make a code for an online-pants service go viral than one for a ride-sharing service. "Plus, it’s a balance of time and effort versus the company possibly catching you and taking away your earnings," he says. He's still miffed about Uber repossessing his credits. "I never felt guilty because in my eyes, I was operating 100% within their guidelines. I wasn’t doing anything illegal. I was a great promoter. I got thousands of people to sign up."

In November, Uber changed its terms of service to add a section on "Promotional Codes" that says users shouldn't make theirs "available to the general public." Airbnb's terms specify that its codes should "only be shared with personal connections" and that codes shouldn't be "published or distributed" in places where readers and recipients are not explicitly your friends, "such as coupon websites, Reddit, and Wikipedia." (Is Wikipedia really a go-to e-coupon spot?)  Lyft's ToS prohibit users from advertising their codes on sites such as "Google, Facebook, Twitter, Bing and Craigslist." Spokesperson Paige Thelen says Lyft mainly objects to paid ads on those sites, "which is something we have seen, and don't want to see done."

That's partly how an Uber user who I'll call Ryan built up his ride-credit stash. He posted his code to coupon sites and used Google ad words to place ads on searches for phrases like "Uber deal" and "Uber promotion" that linked to his promo code on the site. Each click and sign-up made him more money than the ad cost him. He accumulated $20,000 in Uber credit across multiple accounts.

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Uber didn't respond to an inquiry about its promo codes, but Lyft's Thelen says her company is "in close touch with Google and Facebook about ads that were running and let them know those things are prohibited."

Ryan was alarmed when he saw Jareds' story of zapped credits in Business Insider and came up with "tactics" to disguise what he had done. He is a skittish dude and refused to tell me what those tactics were for fear of making it possible for Uber to track him down, but one thing he does is to give all of his drivers five stars so that his account doesn't get reviewed. At one point, a friend left a suitcase in an Uber driver's car by accident, and Ryan refused to contact Uber for help even when the driver wasn't responding to phone calls. (He eventually got a hold of the driver.)

Ryan is unrepentant. "When someone is searching for a promo code, if Uber really wants their promo code to be used instead of a referral code, they should make their offer better," he said by phone. It makes more sense for Uber to give out $30 to first time users with its own promo code, for example, than to give out $40 total, split between a new user and a referrer.

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Blake Jareds now wishes he'd changed the email address associated with his Uber account and changed his promo code in order to "hide out" in the Uber system and not lose his credits. "I was lucky. I was in the right place at the right time," he says. "I would try again with a younger type company that’s not a household name yet, like Uber was when I first started this. But I would approach the company first and make sure they’re okay with what I’m doing."

*People asked that their full names not be used for fear of incurring the wrath of the start-ups for their promo code scheming.