{"id":3998,"date":"2017-04-28T11:00:01","date_gmt":"2017-04-28T05:30:01","guid":{"rendered":"http:\/\/gtm360.com\/blog\/?p=3998"},"modified":"2022-01-01T17:54:23","modified_gmt":"2022-01-01T12:24:23","slug":"uber-creates-loyalty-to-the-deal-but-not-for-the-brand","status":"publish","type":"post","link":"https:\/\/gtm360.com\/blog\/2017\/04\/28\/uber-creates-loyalty-to-the-deal-but-not-for-the-brand\/","title":{"rendered":"Uber Creates Loyalty To The Deal But Not For The Brand"},"content":{"rendered":"

In his book Loyalty 3.0<\/strong><\/a>, author Rajat Paharia, Founder of gamification solution provider Bunchball<\/em>, says that loyalty programs of most brands generate loyalty to the deal but completely fail at their fundamental purpose of fostering loyalty for the brand.<\/p>\n

Uber is a great example of one such brand.<\/p>\n

The world’s largest rideshare company extensively uses targeted offers to generate loyalty for its deals, as we saw in Mastering Targeted Offers – The Uber Way<\/strong><\/a>.<\/p>\n

In this post, we’ll see how, ironically, one of its targeted offers – and a few other sharp practices – hamper the fostering of loyalty for the Uber brand.<\/p>\n

Let’s get on with it.<\/p>\n

#1. SHADY WAY OF SURGE PRICING<\/strong><\/p>\n

\"\"<\/a>I’m looking at surge price.<\/p>\n

For the uninitiated, surge price is a multiple of normal fares charged by Uber from time to time. For example, 1.25X surge means the fare is 25% more than the normal fare and 8X surge means the fare is eight times the normal fare (Don’t flinch, Uber has reportedly run trials of 50X surge in Sweden).<\/p>\n

Surge is a form of dynamic pricing practised by airlines and hotels for ages. While these industries have gotten away with the practice, Uber has attracted a lot of bad press<\/strong><\/a> for it. That’s probably because users of cabs are hard-pressed in a way that vacationers and business travelers are not. But I digress.<\/p>\n

Uber uses fancy verbiage to spin surge pricing. According to its website<\/strong><\/a>, \u201csurge helps ensure that pickup is available quickly and reliably\u201d. But virtually no customer likes surge. As HBR<\/a><\/strong> says, \u201csurge pricing has a major image problem. Hardly anyone has a good thing to say about it, and far too many people\u00a0equate it with price gouging<\/a>.\u201d<\/p>\n

That includes me. I abandon my booking whenever I suspect a surge price. Which, according to personal experience and anecdotal evidence, is switched on quite regularly:<\/p>\n

    \n
  1. 3X surge the moment it starts raining in Mumbai or snowing in New York City<\/li>\n
  2. 2X surge when phone battery goes below 20% and 4X surge when it goes below 8%<\/li>\n
  3. 5X surge if you enter a hospital in the “Where to?” box.<\/li>\n<\/ol>\n

    The second and third instances of surge pricing belie Uber\u2019s claim that it uses surge solely to match demand and supply.<\/p>\n

    But Uber is a for-profit company operating in a free market and it’s well within its rights to seek whatever premium it wants whenever it wants. Just as I’m well within my rights to take an Uber ride or not.<\/p>\n

    So surge pricing per se<\/em> does not sully Uber\u2019s brand image (although it does crimp repeat purchase).<\/p>\n

    \"\"<\/a><\/p>\n

    What does tarnish Uber’s brand in my mind is the way it communicates \u2013 or does not communicate – surge pricing.\u00a0When it introduced surge a couple of years ago, Uber had committed that it’d provide warning of surge pricing before passengers confirmed their booking. That’s not happening lately.<\/p>\n

    After I updated to the latest version of Uber’s app, I don’t see any surge warning.\u00a0If I want to avoid getting ripped off, I need to find out my trip distance and time, calculate Uber’s normal fare for the trip, compare the figure with the estimated fare displayed by Uber, and then infer whether surge pricing is on or not. Every booking has become a painful, mini-R&D project. As a result, I think twice before I fire up the Uber app.<\/p>\n

    #2. AMBIGUOUS RECEIPTS<\/strong><\/p>\n

    Uber displays the receipt summary on the app and sends the detailed receipt by email.<\/p>\n

    Receipts have become ambiguous of late. My wife\u2019s receipts show distance and time fares separately. Mine only show the overall fare. When Targeted Offer #4 (25% off for next three rides. No Promo Code required) was on, I booked a ride from her app and got the promised 25% discount. I happened to book another ride on the same day from my app. I expected either 25% off (assuming I was eligible for the offer but hadn’t received Uber\u2019s communication about it) or no discount (if I wasn’t eligible for the offer). As you can see from the receipts for these two trips, something else happened:<\/p>\n

    \"\"<\/a><\/p>\n

    On this occasion, I got a gift horse that I shouldn’t look in the mouth. But, on another occasion, I might get a 4X surge slap on my face. Scary!<\/p>\n

    #3. OSCILLATING BUTTONS ON ORDER PANEL<\/strong><\/p>\n

    The UberGO button normally comes before the UberX button on the ordering panel of the app, as shown below.<\/p>\n

    \"\"<\/a><\/p>\n

    For the uninitiated, the cheapest private cab offering of Uber is UberGO, which is a hatchback car. The next higher offering is UberX, which is a sedan.<\/p>\n

    One day, I was going to travel to a frequent destination. I got a fare estimate, which was almost double the usual fare to that destination. I was wondering if surge was on. It wasn’t. Just that, by habit, I’d tapped the second button on the panel to order an UberGO but, on this occasion, Uber had placed the UberX button on the second place.<\/p>\n

    \"\"<\/a><\/p>\n

    In short, Uber had tried to trick me into ordering the costlier UberX cab when I wanted the cheaper UberGO option. Sneaky!<\/p>\n

    (#ProTip: When you book an UberGO, more often than not you end up getting the more spacious UberX cab. That’s because UberX drivers tend to accept UberGO orders. Therefore, savvy riders never book an UberX – they just enjoy it without paying anything extra by booking UberGO!).<\/p>\n

    #4. CASUAL\u00a0SOCIAL MEDIA SUPPORT<\/strong><\/p>\n

    After I updated to the latest version of the Uber app, I noticed that the UberHIRE button was missing. Like I do with all brands as my first port of call<\/a>, I tweeted to Uber.<\/p>\n

    Let me reproduce the thread below:<\/p>\n

    \n

    Ketharam, we are sorry to know about this. Have you tried to delete and reinstall your app once?<\/p>\n

    — Uber India Support (@UberINSupport) April 13, 2017<\/a><\/p><\/blockquote>\n