The pitfalls and benefits of Uberisation

A new (and heavily publicised) generation of businesses is popping up, inspired by Uber. The private hire app is the poster child for start-ups looking to lead new behaviours and alter customers’ expectations of business services by improving customer experiences.

The success of the ‘Uberisation’ business model means it has been echoed by many other (now fast-growing) businesses like Airbnb and BeMyEye, which allows the public to earn money by collecting product data for brands from within shops.

Unlike the corporate giants they are competing with, they can be more nimble and excite with a fresh proposition – often at a lower cost.

The question is: do established businesses need to follow the ‘Uberisation’ business model if they’re to compete into the future?

>See also: How to be like Uber – and not be Uberised

The simple answer is no – every business doesn’t need to operate in the same way and it won’t always be appropriate to connect the consumer straight to the provider.

Jumping on the Uber bandwagon for the sake of it is not a route to success – however, businesses need to consider their assets and respond to changing consumer and marketplace expectations.

What has made Uber successful is that it looked at the problems associated with ordering a taxi and solved them by providing a better way of offering the service.

If the way that you service a customer could be improved, especially in the space of digital and mobile, a business is at risk of being disrupted.

To find the point where this could occur, businesses need to examine what their customer experience truly comprises of: processes.

An ineffective process is where disruption often occurs, with ‘disintermediation’ removing the laborious tasks from the consumer and replacing them with a technological solution.

Whilst doing this, established businesses must not lose sight of their assets, including reputation, customer base, brand name and financial stability.

Rather than fear the emergence of industry disruptors, the opportunity lies within identifying the potential point of ‘disintermediation’ that could exist between a business and its customers, and leveraging what you have right now to succeed.

Innovation can’t be switched on and off

Uber’s approach to constant innovation should be admired. The company has continually improved its service by introducing new features like Uber Pool, which allows users to share rides, and Uber Eats, where food can be delivered by an Uber driver.

Established businesses can be like oil tankers: hard to turn, weighed down by lengthy, corporate processes, and needing to repeatedly hit monthly business goals.

Working towards goals on such a short-term basis makes it almost impossible for an organisation to innovate in the way that Uber has.

There needs to be an emphasis on ‘method’ as the most valuable measure of innovation – it’s the only way that it can succeed on a permanent basis and become a part of a business’s culture. Innovation must be thought of within the process – not just as an end goal – which can then lead to wider transformational projects.

Innovation in its purest form is the introduction of new things, which means that technology needs to be a key part in overhauling and improving. But being digital is not a box-ticking exercise and creating a tech team does not mean that the job is done.

Businesses should be investing time for all of their teams to innovate, as it’s often at the service delivery or back offices where the pain points are most obvious. It must become an ongoing aspect of business and staff development.

Collaborate internally and externally

One of the biggest innovation downfalls that businesses have is not collaborating across departments.

Gaining input from all aspects of its business means an organisation is better placed to fully understand the customer journey and put them at the centre of what they do.

Businesses should not design customer experience based on what an individual department wants to do – they should think broadly about their customers and design an experience that solves their problems.

Recent research commissioned by Squiz and conducted by Forrester revealed that businesses should be looking to external partners to innovate.

In 2015, Uber announced a partnership with Facebook, allowing consumers to hail Uber cabs directly from the Facebook messenger app.

>See also: The Uber-fication of everything: how Uber changed the world

This not only gives Uber access to Facebook’s massive audience but also enhances the service that Facebook can offer to its user base. This is a prime example of external collaboration in order to innovate more widely.

A survey conducted by a research centre at the International Institute for Management Development says that business leaders believe four out of ten top-ranked companies in their industries worldwide won’t survive the next five years.

They blame the accelerating change in technology, shifting business models and a need to merge to cut costs. What’s clear is that, ultimately, businesses must respond now to prevent facing challenges in the future.

While overhauling a business towards an ‘Uberisation’ model is not always going to be the perfect answer. Undertaking business transformation projects that enable organisations to give their customers what they truly want will ensure they stay ahead of a start-up sector that is only just getting started.


Sourced from Stephen Morgan, co-founder, Squiz

Avatar photo

Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

Related Topics