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?