If you’re not familiar with it, Uber is the $50 Billion company that allows people to become, in essence, cab drivers without having to buy an expensive cab license or renting a cab from someone who does. It’s the AirBnB of cars.
If you wanted to buy a license for a new cab in Edmonton from the city it would cost you $250,000 or so right now. In Vancouver, about a million. In New York? God knows how much. What this means is that no one new is getting into the cab game. If you want to drive a cab, you have to drive for a company who, years ago when they were affordable, bought the licenses.
I was suspicious when I first heard of Uber but after years of terrible experiences with cabs (e.g. not showing up or waiting for me, card machines that broke, drivers who had no idea where they were going, showing up late etc.) I was willing to try something new. This willingness was only expanded when I heard stories from cab drivers about how poorly they were often treated by the cab companies for whom they worked and how little they got from them.
Uber offers benefits to its drivers and passengers that local cab companies, for the most part, do not. Here are a few that come to mind that Uber offers that most local cab companies do):
- you book the car on your phone, using their app. No need to call in and wait on hold for 15 minutes to order. You type in the address (or it can just direct people to where it knows you to be using the phones locator/GPS service thing) and the first available driver nearby grabs the order and they show up at your house. My local cab companies do this but Uber’s interface is better and easier.
- you can cancel with the app as well. This is huge. No waiting on hold for 15 minutes with the cab company to cancel the cab. Why am I being punished for trying to do the right thing? Again, my local cab companies offer this with the app.
- you can see, on the app, where the car is in relation to you. No more waiting in a cold porch or risking not waiting in said porch and having them show up and drive off without you. My local cab apps do this too, but Uber’s is much more accurate.
- paying with credit card. No cash exchanged. No card machine needed. You get out and walk away and the app charges your card for the amount of the trip. I’ve had a few times catching a cab where their card machine wasn’t working so they drove me to the nearest convenience store to take out cash at an ATM adding 15 minutes to my trip. Ugh.
- rating system. This is, I think, my favourite aspect of Uber. At the end of each trip, you have the chance to rate your driver from 1 to 5 stars. This seems to turn into much better customer service from drivers. And they get to rate you as a passenger. This means, as a passenger, you can avoid bad drivers and, as a driver, you can avoid picking up abusive passengers.
- ability to give feedback. Not only can I rate the drivers, I can give direct feedback they’ll make sure the driver hears. Good or bad.
- they’re on social media. Edmonton’s two cab companies, no doubt wanting to avoid the complaints and hassles (and possibly still mired in the 20th century) were not on Twitter. For the modern company, Twitter is the frontlines of customer service. Uber is incredibly fast in responding to tweets.
- cheaper. Uber is just not as expensive as cabs.
- more flexible driving schedules. Many uber drivers have told me that what they love most about Uber is the flexibility of when they can drive. If they book a cab, they have it for a block of time and pay for that time. So, if they pay $500 for a 12 hour chunk of time, they make no money for themselves until they pass $500 in revenue. This means no time for breaks. Uber drivers can start and stop whenever they want.
Uber: A Case of Value vs. Values
In my experience, Uber deliver more value than cab companies do.
But, it falls short on the values proposition in my mind. Before I delve into why I think that, let me share an excerpt from The Way of the Radical Business which breaks down the difference between the value and the values propositions –
The Values Propositions and The Value Proposition:
This is where we start talking about the results that we’re promising people. Something I want to lift up for all of us here that’s so important is that a lot of it is we’re conscious businesses. We’re green. We’re eco-friendly. We’re community minded and it’s really important to distinguish here between a value proposition and a values proposition.
The values proposition is your values. You know, “We’re green. We’re eco-friendly. Every year we do an ecological footprint on our business. We use only recycled products. We’re fair trade, living wage. We give 10% of our profits to a charity.”
And it’s important to create one. I was recently at the launch of Calgary’s new green business network, www.reapcalgary.com and the founder pointed to a monster.ca survey that had been done where 78% of Canadian employees would leave their current job for a more conscious, green job. And 81% of 1275 surveyed agreed that their employer was either polluting, ignoring the need to become greener or needed help in moving in that direction.
All things being equal, companies with a solid and compelling values proposition enjoy: more customers, more loyal customers, more leeway when they screw up, more loyal employees and more credibility in the marketplace.
In case, you don’t care about these and are thinking of ignoring it (or you’ve got a great values proposition and are too lazy to tell people) you might be interested to know that not only are more companies joining this green revolution. More companies are reporting it to their investors, board, employees and customers. Out of the top 250 companies in the world, 35% created sustainability reports in 1999. In 2005, it almost doubled to 64%. 45 of the top 100 American companies do. 87 of the top 100 European companies do.
But, this is a vital point. It’s not just enough to identify your values proposition – you must then embody and communicate it to your staff, your customers and anyone else important. And you must be specific.
What codes of conduct do you hold?
What values based certifications do you have? (e.g. certified organic, fair trade etc).
Have you been endorsed by any significant non-profits?
Are you a part of any local, green business initiatives? etc.
So, your values proposition is vital. But, it’s not going to be the only reason why people buy. There’s a small chunk of the population that’s why they’ll buy. They’re hard core. They’re just going to buy because of that even if they have to spend a lot more.
Even those people, there’s still fundamentally this question of a return on the investment which is the value proposition. So there’s the values proposition which is your values, and then there’s a value proposition; What is the value they get out of it? What’s the return on investment?
I see this and it breaks my heart so much because I see so many great, good-hearted green conscious cool entrepreneurs who are really frustrated with why they’re not getting more business.
It’s so clear to me when I look at it because they focus all their efforts on their values but not on the value the customer’s getting. It’s a super tragic mistake, so just to notice where you’re oriented.
It’s not that the values don’t play a role. They can be very, very powerful as an augmentation to the value that people are getting from your business. But it can’t be the whole thing.
For different target markets there’s probably going to be a different ratio but consider both of them.
Here’s a great example: your car breaks down and just as you pull off the road you magically pull into an autobody shop. Amazing. What luck! And not just any shop. It’s a ‘green/ecofriendly’ shop. They greet you warmly, serve you organic snacks and delicious fair trade coffee while you wait and read cool, progressive magazines. You get a free buspass just for doing business with them and they encourage you to drive less. Amazing. You leave in such a wonderful mood and then – a block later – your car breaks down with the same problem. They embodied their values but didn’t deliver on the value.
If you have great values but don’t deliver value and then someone else does, you will likely be ditched hard and fast.
Where Uber falls short, in my mind, is on its values proposition:
Uber has cracked the value proposition of what I actually want from a cab. They understand what is most important to me as a customer, but they don’t understand what matters most to me as a community member. There are two main ways this shows up.
- Shopping local matters: Uber is not local. Therefore a certain amount of money leaves the economy every time I spend money with Uber. The Sharing Economy (of which Uber and Airbnb are poster children) may not be so sharing as we thought and might in fact stand squarely in the way of whatever version of positive revolution for which we might home – the sharing economy might make revolution impossible. What if they became a co-op and shared their wealth?
- Safety: Uber has had a checkered past in terms of its safety for female passengers and concerns about how it vets its drivers.
So, many people I’ve known have felt caught.
Do we support the local cab companies where the money stays local and drivers are screened better? Or do we spend out money with a company where some of our money leaves our communities forever to line some executives pockets but where the value proposition is so much stronger?
Honestly? From a values standpoint, I’d rather spend my money locally but, these days, I don’t as much when it comes to cabs.
Here are five ways my local cab companies could win me back:
Local cab companies already have stronger safety and the built in benefit of being inherently local companies. But, most of them have become incredibly lazy about customer service and offering value because they have had a monopoly for decades and no reason to care. Here’s what they could do…
- Be on Twitter: Get on Twitter and respond to people’s tweets immediately. Will most of the tweets be about frustrating experiences? Yes. But that’s where you can show the world publicly how good you are at customer service.
- Allow me to give anonymous feedback on my drivers: Waiting for 15 minutes on hold on my phone to give feedback on a frustrating experience only makes me more frustrated. Doing this after I’ve already spent ten minutes looking for some email or customer service form on your website with no success? Even more so. Let me just type it in on my phone, send it and be done with it. And then let me know that you actually value that feedback by personally replying to it and offering me a discount on my next ride if it was truly horrific. Uber does this. How many times have I had cabs no show, have their debit machines not work and they have to drive me to a corner store to hit an ATM to pay them. Or this recent experience: “Cab drives me home. Fare is $8.20. I give him a twenty. Then 1) he gives me back $10 and assumes the tip 2) lets the meter run up to $8.40 as if I wouldn’t notice. 3) doesn’t have change to make up the difference.”
- Use any of these five ways to show you give a shit about your customer service: If your drivers were being rated, maybe that accountability would have them actually want to do a good job. Here are some simple things any driver can do to impress their clients that nobody seems to: 1) Have a box of tissue in the car. 2) Offer a bottle or carton of water to your fares. 3) Offer gum (a driver recently did this and I was so grateful). 4) Have a way for me to charge my phone during the ride. 5) Have a copy of today’s paper. 5) Ask me if I want to listen to music and what kind.
- Let me pay with credit card like Uber does: Man. I am tired of machines breaking down or feeling rushed to get out of the cab because traffic is piling up behind and I’m trying to use my debit machine or fishing money out of my pockets and waiting for you to count the change.
- Treat your drivers better: I’ve heard so many horror stories from cab drivers or neglect from the owners who simply collect their money every month. Why not offer profit sharing? Why not find ways to take such good care of your employees that they’re constantly glowing about you?
If one of my local cab companies did all of those things, I would be more than thrilled to bring my business back to them.
Until then, I am going to continue my love/hate relationship with Uber. While I ride in their cars.
Update: Edmonton is getting a new local service named TappCar that I’m excited to see as an alternative to both Uber and the local cab cartel