Enabling Technologies

Uber treats Payments as core to the customer experience!

MEDICIFounder and Chief Strategy & Innovation Officer

I had the opportunity to help a couple of companies in the taxi booking app/services domain. I was consulting them on entering new markets and customizing the product and services to the market. And the experience that I gained from the engagements is that mobile payments, transparent billing and receipts needs to be an integral part of the Taxi booking services to enhance the customer experience. And Uber is a great example of that.

Found in 2009 by the founder of Expa and StumbleUpon, Garrett Camp along with Travis Kalanick, the founder of world’s first P2P engine, Uber has been quick in grabbing the attention of some major venture capitalists. With names like Goldman Sachs, First Round Capital and Benchmark already in its investor’s list, Uber’s most recent additions to the list are Google ventures and TPG. Google has invested $250 million in the startup along with TPG, which has picked up shares worth $90 Mn. Uber has currently been valued at $3.2 Bn by Google ventures.

Coming back to payments. There are 3 processes central to the customer experience of booking a Taxi service. These can be experienced by a user right from booking a cab, to moving from point A to point B, they are:

1. Discovery of the cab - The mobile app helps a user in locating where the cab is, book it and the time it will take to arrive at the customer's location.

2. Transparency of the billing information and receipts - While the meter is running in the cab, a user can also see in the smartphone the distance travelled from source, and the billing as it happens. A user can also store the receipts in the smartphone to claim for refund or for record keeping purposes.

3. Payment options like tap and pay through a smartphone - This brings in the ease of use factor, customers need not pay through cash, worry about change or worry about carrying cards. Customers can just use their smartphone, activate the app, fill the amount or card details and tap it, to enable the payment.

The way they got process 1 to 3 sorted out in Uber are the key to the overall popularity of the system. Therefore Uber's case is a classic example of how mobile payments can become a part of the whole customer experience in transportation.

The business model of Uber is very simple, use technology to provide information to the customer in order to make their ride as predictable and as transparent as possible so as to make them feel safer and comfortable. A user can book a taxi either through SMS or a mobile app. The user is given the option of choosing his/her own driver based on the reviews of earlier customers. The app also calculates and displays the approximate fare value. Uber has also added a new feature wherein nearby customers can share a cab and hence the fare.

As soon as they have finished booking, the customers can start tracking their cab. They also receive a text message when the cab arrives at their gate. After a comfortable ride, the customer can just thank the driver and step out. The fare, including the tip, is automatically charged to their credit card on file. This credit card information is taken from the customer at the time of installation of mobile app and can be changed later on. A mobile receipt along with the trip summary is sent to the customer. The customer is also given the option of rating the ride and the driver. This type of payment system also allows Uber to extend "promotional offers" to first time users through various promotional codes.

Recently, Uber has also introduced an option for the customer to pay the fare through Google wallet by linking their Google account with Uber app. This makes it easy to switch between different cards tied to a single account and also helps the customer in keeping all their payment at one location.

After being successful in the US market, Uber has been aggressively expanding worldwide, most recently in Asia. On 30th August, 2013, Uber completed a trio of debuts in three consecutive days, with Dubai and Cape Town preceding the Bangalore debut.

Uber debuted in Bangalore in September 2013. Uber also has plans to roll out its operations in New Delhi, the capital city of India. Currently, Uber is available in 18 countries. In developed countries like USA, Uber has faced stiff challenge from low-cost real time ride-sharing startups such as Lyft and SideCar.

With their launch in India, people may start using Uber’s Luxury Cab service and its app but this is a country where over 96% of transactions are conducted in cash, and there would be a lot of challenge for Uber. Most of the successful taxi services like Meru offer cash and other payment modes.

LTP View: There are a few case studies of how transit systems, retailers like Starbucks and internet companies are making payments easy, transparent and like a breeze. Uber's case is a classic example of how mobile payments can become a part of the entire customer experience in transportation. In the sign up form you can't go ahead without filling card details which means that Uber greatly believes in a cashless transaction and that payment must be a small seamless step after one time sign up.

Amit Goel

MEDICIFounder and Chief Strategy & Innovation Officer

“Amit Goel is the Founder & Chief Strategy & Innovation Officer for MEDICI. Amit’s vision is to build a strong FinTech market network that involves financial institutions, banks, startups, investors, analysts & other key stakeholders across the ecosystem – helping each one of them in a meaningful way by removing the asymmetry of information and providing a platform to engage & transact.\ \ Amit is passionate about bringing actionable FinTech-focused insights, innovative products & services for the FinTech ecosystem. Some of his work involves startup scores, bank scores/assessments, predictive viewpoints & other innovations that have helped MEDICI’s customers and the ecosystem. He has been named amongst the Top 100 FinTech thought leaders/influencers in the world & Top 10 in Asia multiple times by reputed agencies, consulting firms as well as financial institutions. Amit has built MEDICI (formerly LTP) as a new-age, tech-enabled advisory/research firm, which is now considered the #1 global research & innovation platform for FinTech in the world.\ \ Amit has been writing pioneering viewpoints on financial technology space that have been ahead of the curve since 2010. His data-driven predictions have helped the customers as well as the ecosystem. His past work experience includes a strong background in strategy & market analysis and advisory to clients (from big business houses to Fortune 500 firms) in payments, commerce, financial services & IT/technology. In the past, Amit had also founded a successful consulting & research practice called GrowthPraxis and has worked at Boston Analytics, Frost & Sullivan, and Daimler Chrysler in strategy & research.”