The downfall of Uber - usability and convenience are no longer enough

Only time will tell whether Uber’s dramatic fall from grace this week following the leak of 124,000 confidential documents to The Guardian will impact its position as the dominant ride-hailing service in cities like London, but it does contain a stark warning for every brand.

The rise of usability and convenience

Back in 2015 Tom Godwin famously asserted that "owning the interface" is where all the value and profit is – by then businesses like Uber, Alibaba and Facebook were providing indescribably thin layers that sit on top of vast supply systems (where the costs are) and interface with a huge number of people (where the money is).

This was by no means the full picture of course. The secret behind the success of disruptors like Uber wasn’t just the creation of a super-usable, yet skin-deep interface, it was also the way they identified and solved real customer problems in new and innovative ways. Usable and convenient.

In time this has become a mantra for every brand, whether direct-to-consumer or business-to-business - by understanding the pain points their customers experience across their entire purchasing journey and developing new digital products and services to eliminate this pain, brands can innovate and grow. 

A recalibration - the importance of values.

Fast-forward to 2022 and all of a sudden this isn’t enough:

Customers now expect more - They have new motivations beyond price and quality – 72% expect companies they’re doing business with to understand and address their broader needs and expectations.  They are ready to abandon brands that don’t support their values and they are willing to pay more to those that do. Ref [1] 

Sustainability is everything - Sustainability is now well and truly in the mainstream consciousness and it’s about so much more than protecting the environment, it requires concrete actions towards social responsibility and economic inclusiveness. Today, more than half of consumers will switch brands and close to half will pay more to buy from brands that align with values and concerns around sustainability. Ref [2]

It’s not just about the pandemic - the pace of change has accelerated for good - For evidence of that, we can look at just how big the gap between customer expectations and the real-world brand experience has become in recent years. Today, 79% of customers are changing their purchase preferences based on issues like sustainability, but brands are stuck in a past when it remained peripheral – just 36% think customers will vote with their feet (and wallets). What’s more, with younger generations leading the charge in a world lurching from crisis to crisis, that change is really just beginning. Ref [3]

What this means for brands

We have reached a tipping point, at which (using the old adage) doing things right has become as important, if not more important, than doing the right things. There is growing evidence that brands that fail to do both will be rejected by customers and that ultimately this will be a significant factor for business success.

As a result, brands must look beyond the user experience to consider every aspect of the brand experience they deliver and how effectively they communicate what they're doing - and there is no room for complacency. It’s not enough to be acting in the right way, your customers and prospective customers must be aware and believe you are doing so – and this is where there is a lot of work to do. 

Brands will need to understand much more about their customers - not just their needs and expectations from a transactional perspective, but also the bigger picture - their attitudes and values. They need to understand them now and as they continue to evolve.

They will need to ensure they are taking genuine steps towards a truly sustainable future, covering the huge spectrum of issues this involves, from care for the environment to inclusiveness, productive and positive employment practices, fair trade and corporation tax policies.

Finally, they need to find ways to communicate these steps to their customers and society as a whole. Whilst 65% of brands think their customers are highly aware of their sustainability initiatives, customers themselves are not so sure – 49% say they do not have information to verify sustainability claims and, as a consequence, 44% simply do not trust them. Ref [2]

So back to Uber..

Uber may still dominate the ride-hailing market, with 45,000 drivers in London alone (1 in every 200 members of the population), but unease about working conditions for drivers has hardly been a secret for some time. Maybe it’s a coincidence but Uber’s growth stalled some time ago, and its share price slumped.

Add to this the allegations of highly questionable business practices that are emerging on a daily basis and there's every possibility that this dominant position will be challenged in the future, as customers respond to this deluge of negative publicity and sentiment.

Meanwhile - and as if to prove the point - Beat, a Mexican ride-hailing service that uses only electric cars and offers its drivers health screening, is one of the world’s fast-growing ride hailing services, despite charging roughly twice as much as Uber. Ref [4]

Make no mistake, this kind of tangible alignment with customer values – from sustainability to community – will increasingly separate the winners from the losers, so the future does undeniably belong to brands that focus on making this alignment a reality. 

References

[1] Accenture, The Business of Experience

[2] Cap Gemini, How sustainability is fundamentally changing consumer perceptions

[3] Accenture, Life Re-imagined

[4] https://www.ft.com/partnercontent/beat-mobility-services/green-light-beat-the-ride-hailing-company-thats-taking-on-uber-in-latin-america.html

 

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