The Uber Effect – Toward Frictionless Commerce.

The Smart Phone has had a transformative effect on the way we live our lives, and on the way we do business. Putting the power to make secure payments into a pocket-sized slab of silicon and plastic that knows where in the world it is has proved a truly disruptive technology. And of course few businesses have been quite as noisily disruptive as Uber. Their intervention has provoked howls of outrage and pain the length and breadth of the taxi-driving world. Suddenly the uncertainty of booking a cab for an important journey was gone, taking with it the inconvenience of reaching for one’s wallet at the end of the journey.

All this was done in the face of an incumbent rival whose existing infrastructure, had the incumbents used it wisely when smart phone technology appeared, ought to have proved an insuperable barrier to Uber’s entry. That Uber did it so successfully, without significant price-cutting (indeed their peak charges, which respond appropriately to the demand for resources, are famous for being higher than the legacy taxi industry’s), is surely testament to the fact that they were offering a product which differed radically from its predecessor.

Frictionless Commerce?

This is a sobering thought for all service businesses, because it implies that a business which neglects to take the opportunities offered by technology to offer better service may suffer very unpleasant consequences. So it’s worth analysing just what has made Uber so successful:

Uber recognised that the taxi industry was not serving its customers well.

• Booking a taxi was cumbersome, involving lengthy waits on the phone at times of substantial traffic, or a rather outdated online booking system.
• Bookings were unreliable.
• Journeys had to be paid for by cash, credit card or Cabcharge –an unwelcome inconvenience at the end of a journey.

All these factors act as “friction”, deterring and impeding trade. Small in individual extent, they add up to a major hidden depreciation of the business as a whole. That was fine (except for the users) when no alternative existed. As soon as the option to dispense with them arrived, users voted with their feet. Uber saw that the smart phone allowed them to:

• Connect users with named drivers, using the GPS location of each.
• Locate the driver and display the location to the user on an active map, together with an ETA.
• Identify the customer and retain their payment method.
• Locate the customer and display the location to the Uber driver.
• Enable SMS dialogue to keep both parties informed of unforeseen disruptions to the booking – for instance a major road accident delaying the driver.

Point of Sale – or Point of Purchase?

OK, that’s not an exhaustive list of Uber features – I’m now being asked what sort of music I’d like for my Uber trip – but as a hospitality provider you will see parallels for your own industry in the way Uber identified everything that was uncongenial about the experience of hiring a cab, and removed it.

Take a critical look at your business. Does it have friction?

• Are people queuing, when they would prefer to be enjoying your venue – and perhaps spending in it? They will agree to queue when they see no alternative, but when one comes along the Uber effect says they will embrace it enthusiastically.
• Are they waiting longer than they’d like to for the bill? Again, this is tolerated only until an alternative comes along.
• Is order processing to the kitchen delaying your ability to turn more tables? This may make for a leisurely dinner but will impact on your bottom line.
• As a business owner do you feel you need to always be on site to know what’s actually going on? Life balance can make a successful business and getting transparency on how your business operates is key.
• Are their birthdays being remembered? There may have been no clamour for this sort of hospitality flourish, but when people experience it, they embrace it, and all too soon come to expect it.

All these and much more can be addressed by a well-integrated Point-of-Sale system. Look at it this way – your customers are bringing with them their own “Point-of-Purchase”, in the form of their phone! You’d be silly not to use it.
To learn more about bringing frictionless commerce to your business call Bepoz today on 1300 023 769 or email