How Can Uber Survive? Employ the Human Connection!

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According to Bloomberg, Uber is losing money faster than any technology company ever. Uber lost $1.27 billion in the first half of this year. There are many reasons for   this downslide.  I am an Uber customer and use the car service often.  I think a step to tide the flow of unprofitability is for Uber to focus on improving the customer experience and do a more consistent and effective job to build human connections in order to outlive their competition.

I’m not a financial wizard, but the analysts have indicated that Uber’s losses are due to two primary reasons; one, the percentage of dollars that are dedicated to reimburse drivers is a significant expense.  The company is testing a driverless car in Pittsburgh.  Secondly, Uber was forced to call it quits in China this month, selling its operations to a local rival, Didi Chuxing, rather than continue hefty spending to sustain competitive pricing. Their financials took a big hit.

Again, I am not a financial expert but I am an expert on how to improve the customer experience to sustain a company’s competitive advantage. As any company, Uber is waging a war with its competitors.  In the New York market, Uber goes head-to-head with taxi’s, several black car limousine services, Lyft, and Via. That’s four major contenders now.  Within a year, there could be many more.

Technology can be replicated.  With time and an influx of investment dollars the same or similar service can be duplicated with a reduced price tag. What remains is the human connection, the competitive differentiator that cannot be duplicated. The customer experience will determine success or failure.



These are my suggestions for Uber about how to survive by focusing on improving the human connection:

  • When the customer opens the car door and the driver confirms he or she has picked up the right person, the follow-up should be: “how is your day?” (Of course, drivers must be trained to respond appropriately)
  • Drivers should introduce themselves by name even though it’s on the app and may be visible in the car. “Hi, my name is Ivan.  Let me know what questions you have,” goes a long way instead of not saying anything at all
  • Drivers should know if it’s the customer’s first Uber trip. A checklist should be provided with items to communicate to the passenger: thanks for selecting Uber; how easy was it to use the app? it’s important to note the license plate number before opening the door since many drivers have similar cars, etc.
  • Ask customers which route they prefer if there are options. Have the driver communicate why a route might be preferred because there is less traffic
  • Provide customers with a discount if the ride is cancelled after the customer has been waiting for a car or make sure the replacement driver is aware and apologizes (Recently, this has happen to me twice)
  • Ensure the basics: clean car, available bottles of water on hot days, soft music
  • Upon leaving the vehicle, have the driver double-check that nothing was left in the backseat and wish the customer a good day, using their name. When you say the customer’s name it helps to create a connection and leaves the customer with a more personable experience
  • Update the survey rating system to evaluate areas on how well the driver made a human connection in addition to the general category of “service” currently provided as an option for an overall high or low rating


These days I’m so surprised that the majority of companies, regardless of industry, never seem to have a strategic imperative to focus on incorporating the human connection into the customer experience. Lyft and Via are strong competitors of Uber in New York. Taxis are now becoming more accessible and they are testing apps that will duplicate the ease of Uber’s pick-up and payment. Uber needs to act now.

If Uber waits for their driverless car experiment in Pittsburgh to become approved, the company will never survive. Customers driven around with a driverless vehicle will definitely eliminate the human connection. I’m not sure what they are thinking.

 What are your thoughts?

12 COMMENTS

  1. Your suggestions are thoughtful and appropriate, but the company may have passed the point of no return. Uber has much to overcome.. There are so many anecdotal horror stories from Uber passengers that, even if nothing else, negative WOM about their service has almost mortally impacted their image and reputation. Think Chipotle and Ryan Lochte.

  2. Good analysis Richard. I think you may be right about how the advent of driverless cars would impact Uber – although it’s likely 15-20 years before this becomes mainstream enough to be a factor.

    Although the customer service behaviours you outlined are valid, they also define what may be Uber’s achilles heel. Unlike a traditional taxi company, Uber’s model makes it much more challenging to enforce these kinds of standards. Drivers are independent contractors, which makes conventional training pretty much impossible.

    Even with their Trip Adviser-like rating system, I can’t imagine how they would go about establishing real consistency.

  3. Michael, thanks as usual for your thoughtful comments and insights. I’m not sure if they are beyond the point of no return, but they may be close. And that’s a big problem! Richard

  4. Hi Shaun, thanks for your valuable comments. I do know of many businesses that also employ independent contractors where the service tends to be consistent. I think Uber needs to some how educate their drivers on what consumers want. I have been picked up by cars where drivers have bags of laundry in their trunk, which isn’t professional. It mostly happens outside of big cities, but it’s still under the Uber brand. Have a wonderful day. Richard

  5. Richard, I think your suggestions are solid, but wouldn’t they apply equally to taxis?

    I wasn’t aware that Uber had a customer satisfaction problem. To the contrary, isn’t it generally viewed as a better experience than a taxi?

    Here’s a study in Toronto that found:
    >>
    Ninety-three per cent of those who had used Uber said they were satisfied with the experience, far outstripping the 52 per cent who said they were satisfied with their taxi experience.

    “The users… are really, really happy with Uber,” said Lorne Bozinoff, Forum’s president. “That’s what’s driving this whole usage. If people were as happy using taxis, I don’t know if we’d be seeing this kind of penetration in terms of usage.”
    >>

    I’ve been using Uber more and more in the past year and found (with only one exception) that the overall experience has been great, better than taxis. And I wasn’t unhappy with taxi service. The app, nice drivers, lower cost (and no tipping) have all been a plus.

    Longer term, it seems to me the real issue is not customer service or satisfaction, but driver satisfaction. Uber seems hell bent on market share, which means low prices. Good for customers, sure, but translates into a minimum wage job for drivers.

    And, Uber also appears to view drivers as a short-term solution anyway. When and if self-driving becomes routine (I’m a skeptic), drivers will be disposable.

    My view is that the Uber feedback loop helps keep drivers focused on customer satisfaction. Bad ratings can lead to “deactivation.”
    https://www.uber.com/legal/deactivation-policy/us/

  6. True – there are a lot of organizations that successfully maintain standards with an independent workforce. Our mystery shopping division (as well as other mystery shopping companies) is a great example.

    The difference is the degree of control we have over who works and who doesn’t, and how strictly we enforce our standards. Uber has some 160k drivers, and they don’t appear to have that degree of control. Having said that, perhaps it’s doable if they made it a focus.

  7. Shaun, thanks again for adding to the conversation. Almost anything can be accomplished with focus. I don’t think any task I recommended is that difficult to implement……with focus. Richard

  8. Hi Bob, thanks for sharing the Toronto report. Uber is definitely better than taxis in New York for the following reasons; Uber picks you up at your location (eliminating stress), the cars are typically cleaner, the drivers are not on their mobile phones (unlike taxis), and the tip is built into the fee, which means there is no thinking involved. However, Lyft and Via are also available. And the price of a Via car is half the fee of a typical Uber ride. And generally, the Via car, although it’s a shared ride is a large Suburban. My wife says you feel like a rock star for $5. That’s the New York City situation. We use Uber in the Miami / Fort Lauderdale area and the Uber cars are a mixed lot of dented vehicles that are not very clean. But Uber is great deal less expensive than a taxi.. When I travel to other areas of the country where there are a fewer number of drivers, taxis are generally more prevalent and reliable. Hope this explains my experience. Richard

  9. I agree that technology can be replicated – fairly easily, many times. For that reason, technology alone rarely creates a sustainable proprietary advantage. Customer experience, as you point out, is much harder for competitors to replicate. Overall, consistent delivery of a positive experience involves many pieces, parts, and (even today) tacit knowledge.

    Bob makes a good point about the key role driver satisfaction plays in Uber’s success. The company must sell to them at the same time they must sell to consumers and to the municipalities that control its entry into new markets. A task that compares to threading a needle, but one that can be achieved. After all, there’s plenty of “open space” in the transportation market representing unfilled needs. Some company – or companies) is/are bound to fill it.

    In this instance, I question whether the “human connection” is paramount in positive customer experience. Uber is right to pioneer driverless cars. Don’t consumers want to get from Point A to Point B in a way that’s safe, reliable, affordable, and pleasant?

  10. Andrew, thanks too for adding your wisdom to the conversation. I definitely agree in principle that Uber should be looking at ways to cut costs and driverless cars might be an answer. However, that being said…. it’s way off. I did speak to a few folks who used to work at Google and they told me that basically you have to teach the car the drive as you would teach your kids. And if Uber waits too long, they are going to have competitors who cannot only match Uber’s technology but be competitive on price. I love the blogs on customer think because thought leaders in the customer experience space know how important the customer experience is. You go to any conference and 90 percent of the vendors are technology suppliers who try to sell you on the latest gadget. Without incorporating the human connection, I do not feel it will not give companies a competitive edge over the long run. Richard

  11. I think the small talk does not necessarily lead to a great experience. I don’t want it. What do I want?
    One is consistency: I get the car when I want it, where I want it, irrespective of the rush hour. The driver is polite and welcoming (no need for small talk). Billed properly and easily. My trusted service
    And better than competition in the benefits-cost combination (cost is cost of waiting, price etc.)

  12. Gautaum, thanks for your comments. I agree with you. Small talk other than saying “Hope your day is going well” or “Good morning” may not be appropriate. Just after I read your comment I coincidentally called for an Uber where the driver was a bit too chatty. However, interestingly enough, his rating was 4.9, which was extremely high. I think in any service interaction it’s important that the provider personalizes the conversation or lack of one, based on intuition. Richard

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