Uber is a new-ish app that has consumers falling in love with it and regulators hating it to the core. As a basic primer, Uber is a mobile app that allows a consumer to hail a hired car (towncar, SUV, or taxi) on-demand in a matter of minutes. Not only that, but it allows the consumer to track the car as it approaches, with estimates of how long it will take to arrive. Then, once a consumer is in the car, all payments are handled automatically, with an email receipt sent immediately after the trip is completed. No hassle with credit cards or digging in your pockets with cash.
When I first heard about Uber, I’ll admit that I was quite skeptical about the whole concept. After all, what was so difficult about calling the cab company and asking them for a cab, waiting for the cab and then paying like you always did once you were in the car. I’m skeptical about the “convenience” of mobile payments when the consumer has to pull something out of their pocket and process a payment; whether that is a credit card or a mobile phone, there’s really no difference.
However, since my initial skepticism, I’ve become a believer. Some of it probably has to do with my first experience with the app. My girlfriend and I were stranded in San Francisco after a wedding reception, fighting for a cab on the street corner with a bunch of other bar-goers and watching cab after cab pass us by. I remembered that this new service was available in San Francisco, so I whipped out my phone, downloaded the app, signed up and within literally two minutes, a nice black sedan pulled up, the driver got out and greeted me by name. We were back at our hotel within 10 minutes and we even to a nice bottle of water to enjoy on the ride home.
Since that evening, I have become an avid user of the service, but now that they have a taxi service that compliments the sedan service, I mostly use that. When thinking of the service and what has drawn me to become an engaged customer, it is best to determine the needs, the features and the benefits that make the product experience so unique.
At its core, Uber essentially tackles two primary consumer issues – reliable car transportation in the city and crappy payment processing. These issues are largely solved with just three basic features. It’s a true testament to the power of simplicity in the product and something that other product managers should be aware of as they develop their own products. It also addresses an issue with the drivers, who are also customers of the service.
- Need: Reliable urban transportation – as an urban dweller, I realized that I had become complacent about the bad experience I had come to expect from the taxi industry in Boston. That, however, doesn’t mean that there isn’t a need for reliable transportation options. In particular, Uber was able to seed enough drivers/cars in the cities to make the wait time relatively short.
- Feature 1A: Driver rating system – A key feature of Uber is the consumer’s ability to rate drivers based on their experience. Uber takes these ratings very seriously and for drivers that have an aggregate score that falls below four out of five stars, they are removed from the program.
- Feature 1B: GPS Location – When a car is ordered and confirmed, as a consumer, I am able to see where that car is based on GPS location from the Uber-enabled phone that the driver has. This gives me great transparency into the whereabouts of the car and how much progress they are making towards my location. This feature is a great way to create a more reliable system. Drivers know that they can be tracked so they are less likely to pick up an interim fare or delay in getting to my location to pick me up. Being a consumer, by seeing where the car is, I have a lot more comfort in the fact that the car will actually show up. Often times in the old cab dispatch days, it was very unclear if the cab was actually on its way or not.
- Benefit: Reliable urban transportation – Knowing that Uber takes its ratings so seriously gives me a lot of confidence as a customer that my experience will be top notch and the drivers will show up when they say they’ll show up. In addition, with the transparency enabled by the GPS system, the consumer has much more faith that the car will actually show up when it’s supposed to.
- Need: Improved payment experience – It was a huge upgrade when the cab system began to take credit cards. It seemed like cabs were always in the past decade when it came to credit cards, especially when cards as a form of payment are so prominent in today’s economy. Plus, cab drivers would always hassle you about using your card, even when it was mandated that they accept credit and debit cards. Having to pay cash, or that feeling of terror when you realized you were in the cab and you didn’t have any cash contributed to the standard cab ride being a poor experience. Not to mention the time you waste finding an ATM along the way, convincing the driver that you’re not trying to skip the cab and then withdrawing the money and continuing on your way to your final destination.
- Feature: Automatic billing – With Uber, you load one credit card and that’s it. For every ride after you signup, your card is automatically charged based on the fare. No hassle, no fuss, just a seamless experience and a pleasant car ride to your destination.
- Benefit: No transactions occurring in the cab – No more getting hassled by the cab driver for paying with a card! Yes! Both the driver and the consumer know what to expect with Uber. No transactions occur during the ride and a receipt is sent immediately after the ride, so if there is a dispute, it can be addressed at that time, or once you’re back home from wherever you’re going. There really is no reason for there to be an issue with processing the payment given the technology now at our disposal. Uber just happened to be the first ones to figure that out and create a network of drivers and consumers through wihich it could serve as the payments broker to and eliminate the standard payment processing in the car service experience.
- Need: Increase utilization in between standard jobs for car services – Car services have typically worked on a “for-hire” basis, with a small list of high net worth clientele that relied upon the on-demand service provided by that driver. However, there are long periods of down-time that the drivers experience while waiting for their standard clientele. For example, if Mr. Smith needs a ride to work, and then to the airport three hours later, the driver would typically sit idle for that time, waiting for Mr. Smith to be ready to go to the airport.
- Feature: Direct to consumer app – the Uber app helps drivers find work from “regular” customers who might not have the budget to retain a sedan driver for extended periods of time.
- Benefit: Increased driver utilization and revenue – By enabling more real-time booking to occur, Uber filled the downtime that drivers would typically experience but still give them the flexibility to still serve their traditional clients. This was a huge uplift for the drivers, who could now make money for more hours of the day, essentially all as incremental margin because they were already out working during that time to begin with.
Overall, Uber is a great product because it addresses some key needs of multiple “customers” to create a network of drivers and consumers that make the urban car transportation industry much more reliable, safe and convenient than it has ever been.