The Dx3 2016 Conference Correspondent Whitepaper Presented by Sysomos summarizes some of the top speakers from Dx3 who inspired attendees to take action in their digital strategies.
Ted Graham, Innovation Leader at accounting firm PwC, really embeds himself in his research. With the sharing economy set to be worth $335B by the end of 2025, he wanted to see what was happening with a company like Uber and how to apply it to his industry. So, he became an Uber driver, one of Toronto’s very first, and learned three important lessons.
Lesson 1: How You Treat Partners (Uber’s vernacular for its independent drivers)
Graham was treated well. Application was easy; he used his mobile phone to take pictures of his license, insurance, and the outside of his car. He was picked up by an Uber BLACK car (the luxury version of UberX), and taken to a hotel with other applicants. Onboarding was easy and efficient, consisting of a 30-minute video about delivering five-star customer service, like providing riders with water and Red Bull, with webinars to follow and lots of data science provided so drivers know on an ongoing basis how to take the best routes and improve on customer service.
“At PwC I’ve taken that lesson back to try and figure out how we onboard people — are we as easy to deal with, do we actually help people to understand the brand,” said Graham.
Lesson 2: Feedback
With Uber, passengers rate driver’s every trip, and if they get a low enough rating, they have to go to Uber’s office to get feedback about why they received that rating. Passengers are rated too. The consequences if you have a bad passenger rating are you won’t get picked up or will have to wait longer. Uber values its drivers more than its misbehaving passengers, and they’ve worked out the model so it reinforces itself. They use feedback to enable two-way communication, retain and hire the best people, and protect employees.
“We’re actively looking at ways [PwC] can have that two-way feedback,” said Graham.
Lesson 3: Risk and Reward
Uber has the potential to reduce traffic volume and the need for surface cars in parking lots. That’s the reward. Then there’s the risk; drivers drop passengers off in busy places, the Uber business model is a perceived threat to traditional cab companies, and there are issues around insurance.
“On the risk side there’s a balance there that we need to be able to strike,” said Graham. Almost all personal insurance policies didn’t cover the period between when drivers get a call on the app to when they pick up the passenger, so Uber worked with regulators to find a balance, including developing a ride-sharing insurance product with Intact Insurance. Finding balance for the supply side of the sharing economy unlocks further opportunities.
Ever since 2008, Uber-like companies are increasingly popping up (a total of 500 in 2014, according to PwC), with the intention of capitalizing on the “on-demand” model. The recession forced people to find different kinds of working arrangements, seeing the rise of the freelance workforce, which has been successful (by 2020 almost 50% of the workforce will be freelance), due to the ubiquity of devices that enable people to easily communicate, find locations, other people, and engage in commerce. Essentially, companies like Uber and Airbnb were the result of people looking to better use resources and make a bit of extra money.
When the economy rebounded, people continued loving those services, having bonded to the experience. And as demand grew, it moved us away from regulated inventory (think cab companies), and even shared inventory (ZipCar), towards the Uber of everything. It’s not so much a sharing economy, but a freed market economy, wherein inventory is becoming exponential and includes things like peer-to-peer lending and crowdfunding, online staffing, peer-to-peer accommodation, car sharing, and music and video streaming.
“We are freeing up resources, or people’s time, that was otherwise held captive,” said Graham.