Driving is an integral component of many operational systems, and any small improvement in driving quality can have a significant effect on accidents, traffic, pollution, and the economy in general. However, making improvements is challenging given the complexity and multidimensionality of driving as a task. In this paper, we investigate the effectiveness of nudging to improve driving performance. In particular, we leverage a smartphone application launched by our industry partners to send three types of nudges through notifications to drivers, indicating how they performed on the current trip with respect to their personal best, personal average, and latest driving performance. We measure the resulting driving performance using telematics technology (i.e., real-time sensor data from an accelerometer, Global Positioning System (GPS), and gyroscope in a mobile device). Compared with the “no-nudge” control group, we find that personal best and personal average nudges improve driving performance by approximately 18% standard deviations of the performance scores calculated by the application. In addition, these nudges improve interaccident times (by nearly 1.8 years) and driving performance consistency, as measured by the standard deviation of the performance score. Noting that driving abilities and feedback seeking may vary across individuals, we adopt a generalized random forest approach, which shows that high-performing drivers who are not frequent feedback seekers benefit the most from personal best nudges, whereas low-performing drivers who are also frequent feedback seekers benefit the most from the personal average nudges. Finally, we investigate the potential mechanism behind the results by conducting an online experiment in a nondriving context. The experiment shows that the performance improvements are directly driven by the changes in participants’ effort in response to different nudges and that our key findings are robust in alternative (nondriving) settings. Our analysis further shows that nudges are effective when the variability in reference points is low, which explains why the personal best and personal average nudges are effective, whereas the last score nudge is not.