Uber’s Driver Growth Tactics
Uber’s ride hailing service represents a classic matching problem. Customers need to be matched with a driver to reach their destination. Drivers need to be matched with a customer to drive. However, as Uber continues to improve their business, they realized a major issue: drivers abandoning the platform. Since their employees hold the decision of when they want to work and when they want to quit at the click of a button, Uber needs to find a way to retain drivers to meet the high demand of customers needing rides. Doing so would maximize Uber’s profits and ability to fulfill their customers’ needs. Despite this, drivers actually prefer “scarcity in their ranks”. Having fewer drivers to compete with would allow them a bigger share of the demand to fulfill and therefore more income. As a result, Uber needs to incentivize their drivers in ways that overcome this.
To combat this issue, Uber began sending messages to their drivers whenever they decided to log off the app. Messages included a status report, such as the fact that they were only a certain amount away from earning what seemed like an arbitrary total for their day. This little tactic was actually extremely effective. It allowed the driver to internalize an income goal, just like in a video game, where you progress and level up. Simply stating how close a driver is to a goal motivates and encourages the driver to keep working a little longer. Another tactic that went along with this one to liken working to playing a game was the ability to collect badges for various objectives like excellent service. Furthermore, Uber also implemented an algorithm called forward dispatch. This algorithm essentially sends drivers a matching with a customer before they have even finished the ride they are currently serving. Doing so eliminates the number one thing drivers hate about their work: being idle. This technique keeps the driver busy as much as possible, continuously matching them with the next customer and potentially prolonging how long they end up working.
The article mentions how in general, employers have much more power over their employees than businesses do over their customers. Thus, the government must provide laws like minimum wages and other essential protections. This can be compared to what we learned about power. In this case, employees are mainly tied to the employer who sets how much they get paid, what their benefits are, and whether or not they keep their job. On the other hand, customers are not tied to using Uber, Lyft, or simply calling a taxicab. Customers can make their own decision in what they ultimately decide to use. Businesses thus have less power on their customers than they do with their employees. The simple tactics Uber can use on their own drivers can result in enormous improvements to their business.
https://www.nytimes.com/interactive/2017/04/02/technology/uber-drivers-psychological-tricks.html?mcubz=0