Monday, January 9, 2017

Who's on first - employees, or customers? (Or, why Uber is no Virgin)

Conventional wisdom dictates that the customer always comes first. However, Richard Branson of Virgin famously challenges that notion, stating that his highest priority is pleasing his employees.

"It should go without saying, if the person who works at your company is 100 percent proud of the brand and you give them the tools to do a good job and they are treated well, they're going to be happy."

And if Branson's employees are happy, then he believes that they will make his customers happy, which will make his shareholders happy.

Uber has a different view. Consider how it treats its employees - uh, wait a minute. Uber's actual employees are fairly limited in number, since Uber drivers themselves are not employees of the company. (Notice how ridesharing companies always say you can "work WITH Uber" or "work WITH Lyft" - not FOR.)

Uber's emphasis, and the emphasis of all companies in the gig economy, is on the service. It's not in building a dedicated group of employees, but in building a service that can use interchangeable parts - eventually, for example, there won't be drivers working with Uber any more, as Uber moves to driverless cars.

This emphasis leads to a customer comes first mentality, in which drivers (non-employees) are a distant second.

Although ‘being your own boss’ might sound like a good thing on the surface, there are lots of times when drivers are going to need help from the guys in charge. And even though Uber is constantly refreshing their help section, adding new options for drivers and testing new help features, their customer support reps still struggle mightily to address drivers’ most basic problems....

I think the ratings system is great for passengers since it holds drivers accountable for their actions but there are a lot of ways it can work against drivers too. One of my biggest complaints about the ratings system is that it is a one-sided marketplace. Drivers have to maintain a 4.6 rating in order to stay active, but passengers have no such requirement....

What a lot of these pain points really boil down to is a customer-centric approach to building a business. It’s hard to fault Uber for doing things this way....But it’s clear with a lot of these policies that the real customer is the passenger and not the driver.

Uber makes the retention of customers a high priority, as many companies do. But Uber does not prioritize the retention of drivers - something that leads to all sorts of issues for the company. (DISCLOSURE: I am employed in the biometric industry.
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