Any other business

The Uber business model: Is it right for your company?

4 min read

12 August 2016

In the last few years, all we seem to have heard is that organisations should follow in Uber’s footsteps. But despite what you may have read recently, the Uber model may not be right for your business.

“Uberisation” has become a verb in its own right to describe a disruptive business or business process, specifically by thinking of any business as a tech business.

The Uber example is certainly a good one in terms of showing how a disruptive strategy can reinvent a traditional market by putting technology at the heart of what it does.

A lot of its success can be put down to the company using tech to make the complicated things simple and the expensive things affordable. Many businesses should – quite rightly – look at aspects of its success and at ways they can in turn “digitally transform”.

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But when looking at the dangers of uberisation, there are three things that should be considered:

(1) Evaluate when you need help to overhaul your business model

Uber had the advantage of being new to the market so didn’t have any legacy to overcome – it could start with a blank sheet of paper– or sheet of code, as it were. Many businesses don’t have that luxury, and are instead bogged down with outdated legacy systems and processes.

To actualise digital disruption, businesses need to find the right partner to lead the planning, strategy, and execution of the transformation – and do this in days and weeks, not months and years.

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(2) Recognise that transformation is beyond digital

Technology projects often seek to automate and remove manual processes, but customer journeys still require human interaction. As Uber customers have a face to face interaction with workers whenever they use its service, the company has had to make this a big part of its model.

But, other organisations do not necessarily have this in place. It’s therefore important for digital infrastructure needs to be supported, data needs to be governed and for parts of the customer journey to remain manual.

It’s important take a holistic view of people and processes as well as technology. For example, a fantastic web experience to attract and engage new clients only goes so far. The sales and service team need to live up to the communicated brand promise.

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(3) Make sure your workforce is at the heart of your business

Looking more specifically at Uber, a criticism often directed at its business model is the treatment of driver-partners. A modern business should embrace a diverse, flexible workforce made of permanent staff, contractors, crowdsourced employees and third parties.

But, whatever type of “worker” model you deploy, it’s essential that the individuals get a positive worker experience. This will empower employees to create an exceptional customer experience, which then continues the virtuous cycle.

Following this kind of approach will help improve employee loyalty and productivity which will lead to company growth, customer retention and satisfaction and vice versa.

Most organisations are going through some sort of digital transformation. But, they need to be careful not to completely base this on around Uber’s success.

Before any digital changes start to take place, businesses need to take the time to make sure they have a plan in place that will improve their worker experience, get employees on side and to ensure they are using the right technology to fit their needs which will help them deliver great customer experience.

Justin Anderson is acting GM of Appirio

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