In my earlier post, I shared how Uber, Ola and other similar service providers have the potential to disrupt the local travel market. I am a regular user of their services, as are many others with whom I engage online & offline. The benefits and potential are clear, yet some concerns persist. In particular, I worry that a western market approach to growth is being adopted by Uber/Ola. Let me explain.
In general, there are two major differences between developed markets like the US and emerging markets like India: one, weaker basic infrastructure, and two, insufficient skilled manpower. Infrastructure, in the context of Ola/Uber pertains not only to physical stuff like roads, public transit facilities, good quality taxis, etc. but also to related systems like traffic management, police and credit verification, licensing. By skills, I refer to trained drivers, customer service ethics, customer education, etc. When markets open up, like they did in the past decade in India, everyone goes after the gold rush... but, many hit the tripwires of inadequate infrastructure and skills. Telecom and financial services industries are good examples; other consumer services industries face similar risks.
Keeping the above in mind, here are a few suggestions for Ola/Uber; these are in two categories, the first are immediate fixes to improve customer experience and the second are to build sustainable businesses.
Customer Experience Fixes
1. Fix your location tracking
A typical use case... I'm in a meeting and about 10-15 minutes before it ends, I go to the Ola app and order a cab. Since the app works quite well, it's a matter of a few seconds and I get it done without much distraction. However, in a couple of minutes, the driver calls because he wants to know where exactly I am and/or where I want to go. Obviously the phone is on silent and I have no way of answering the call. He calls a few times and often, does not move from his current location till I have called back and confirmed the pick-up.
Even if I were not in a meeting, I may not want to have that conversation... the reason I am using a mobile app is because it is easy and super quick. Why would you spoil that with the follow-up call? The driver should reach the pick-up point based on the GPS / location from the app. Many drivers have complained to me that they don't get a clear location or a route map on the app. Similarly, the driver tracking on the customer app is often delayed or inaccurate... in my experience, Uber has the best, real-time tracking, Ola is accurate but not real-time and Meru has the worst location tracking.
This tweet from Bhatnaturally summarizes the problem:
Fix location immediately.Hi @Olacabs in your 'reason for cancellation' option in the app, please add 'Driver clueless about pick up location despite GPS' as option
— bhatnaturally (@bhatnaturally) January 15, 2015
2. Penalize errant drivers
The other day, a cab showed up as being 5 minutes away - it was less than a kilometer from my place. I ordered it and went down immediately since I was in a hurry. Ten minutes later, there was no sign of him, so I called his mobile. He answered disinterestedly and said that he was in the queue to fill CNG, so it would take him 15-20 minutes to reach. I asked him why he was showing up online if he was not able to respond to a request... he kind of murmured that that's how it was, and asked me to cancel the booking!
In order to increase the availability of the cabs, the service providers (Ola/Uber) give them a bonus for being online for a certain time daily or weekly... I believe Uber's incentive kicks in at 12 hours per day. Therefore, many of the drivers keep their apps turned on even when they are unavailable to respond to a request. They are willing to take the chance of turning away a customer in order to add to punch in more hours. Also, some drivers refuse to show up when they realize that the destination is not very attractive to them.
Such behavior by drivers defeats the core value proposition of convenience and availability. Not all service providers capture this information (e.g. reason for canceling a confirmed booking); even those that capture it, are they taking prompt action? If a driver refuses a ride - without a legitimate reason, he should perhaps be blacklisted for the day (or more)...
Don't let your core value proposition be diluted.
3. Set an example on the roads
Sometime ago, I was in one of the cabs going to the airport at night. The driver's mobile phone rang and he looked at the screen to check who was calling. Just at that moment, the car ahead of him braked suddenly because an auto came in its way. Since my driver's eyes had moved away from the road, his reaction was a second late and the cab hit the car in front of it. Luckily, there wasn't much damage and we moved on, but there is no doubt that accidents are waiting to happen on the road if you lose focus.
While there has been much discussion on improving security / transparency through better verification of drivers, an equally important expectation from Ola/Uber is that they would follow safe traffic practices. No mobile phone while driving, following speed limits, obeying traffic lights, using a seat belt, using turn indicators while shifting lanes / turning... these have to become standard driving practice. If Ola/Uber cannot have better driving practices than the regular taxis, autos and buses, then what's the point?
Make safe driving a standard practice. Specifically seek customer feedback about it.
Building the Business
This is where Uber / Ola will have to customize their business model for Indian (and other similar markets) context. Yes, they are aggregators / marketing agents that are connecting drivers and commuters... but that is not sufficient. They need to consider investing significant resources towards capability development, even if it means moving (slightly) away from an asset-light model. All the private equity funding need not go in discounting fares / price wars... there is no brand creation due to lower prices. I have three different apps that I check every time I need a vehicle - price is no longer the choice factor; it is availability. And if there are two different cabs available at similar times, I choose the operator whose vehicles are cleaner, drivers appear to better behaved and GPS works better. If you want the customer to consistently choose you over the others (i.e. create competitive advantage), price is not going be the primary factor. Here are a few things that could help build a brand:
1. Invest in driver training
Over the last few months I have encountered at least a hundred different drivers in Mumbai and spoken with many of them. Apart from an induction program that many of them had attended, there was no other training mentioned. Wouldn't the drivers be able to better represent your brand if they were trained in customer service, communication, driving skills, routes & places of interest, etc.? Take the latter item, for instance. Quite a few of the drivers (in Mumbai) that I met have migrated here because of the increasing demand - their knowledge of many suburbs and roads is quite weak. As a passenger, I shouldn't be expected to guide the driver to my destination. A few times when I got distracted on the phone, I would find that we were on the wrong road or flyover...
Customer engagement or experience in this business has three major touch points - the booking app (automated), driver and billing (automated). The only possible opportunity for differentiation is in the human, driver interface.
2. Complement the fleet
I get a sense that the Ola/Uber encourage a wide distribution of the cabs across major locations to ensure availability; however, at the end of the day, the vehicle owner/driver will try be located at obvious demand points. Hotelling's law would suggest that there would be a concentration of cabs in some locations during peak hours and none at other locations. Imagine the customer at this other location unable to find a cab for 15 or 20 minutes - that's not the experience you want to provide. At the same time, you cannot force the drivers to go to these other locations where they may nor may not find any customer.
Therefore, an option for Ola/Uber could be to invest in their own complementary fleet of vehicles to fill the network gaps. Of course, they have to be careful not to cannibalize business from their partners, and use their vehicles as queue busters. In addition, these vehicles could be used for training and demonstration purposes. Another idea could be to have these as high-end vehicles that are occasionally sent to frequent customers as "free upgrades" (similar to the Uber India launch strategy of using Audis and Mercs). Once the network is stable, these vehicles can be moved to other upcoming locations.
3. Think about your enablers
The other day, I was in an Ola cab and at the destination, the driver tried to end the trip. The mobile signal was probably poor, and it took a couple of minutes for the trip summary to show up (zero bill because I had enough money in the pre-paid wallet). While two minutes may not be much, it is surely an irritant if you are running late or the cab is awkwardly parked on the road. [The Uber model of compulsorily using a wallet avoids this issue.] Similarly, another driver complained - at the end of the journey - that the mobile phone or network had failed en-route and therefore, he needed to estimate the fare using Google Maps route distance.
If you want to build a sustainable business, you have to think far beyond the contours of your current business scope. What could derail you? For instance, good quality mobile data networks are critical to Uber/Ola, as they are to several other new businesses. Without a data network, the measurement, billing and payment aspect of the drive would fall apart. Without good quality / efficient cars and roads, your cost structure could take a hit. I am not suggesting that Uber/Ola should become mobile operators or auto manufacturers, but they should surely work towards building alliances & capabilities to ensure that the supporting eco-system remains vibrant and competitive.
I am confident that many of the teething issues that Ola/Uber/Meru face would soon be overcome... local transport / conveyance in the second half of this decade will be far superior to what we have ever experienced.
Do you have any other suggestions... please feel free to share them in your comments below.