Tuesday, December 09, 2014

On Uber..

Something horrific just happened.

And needless to say, the first available scapegoat has since been butchered. At worst, Uber could be guilty of carelessness, and taking shortcuts, but there’s no way, in a society that is supposedly just and “maximum governance”, that this incident would be dignified by a #UberShame hashtag.

I actually used Uber on Friday for the first time.. My experience was extremely positive, and the driver who was also using for the first time, also had only positive things to say. He was most amazed by the fact that the entire roll-in process was handled by 2 people.. It helped him that he was able to opt in and out whenever he was free, so it allowed him extra cash.. As a passenger, I had absolutely no issues, and the whole thing was really seamless.. Including a receipt, no cash transaction involved, no "price extortion" that I normally face when looking for a rickshaw in Pune..

In some quarters, I hear that Uber has itself to blame for its destiny. Maybe so, but I would argue that this is more a classic case of brand positioning and multinationals not understanding the core market dynamics..

In the US, Uber/Lyft/AirBNB etc benefit from "regulatory arbitrage".. Regular drivers have to go through a huge amount of certification and licensing requirements on a periodic basis. Being a cab driver, requires regular visits to the DMV and also periodic inspection of the vehicle. Uber (and Lyft) allow drivers to circumvent this by calling themselves independent contractors. The core benefit of Uber is to the driver, who doesn't need to go through rigorous regulatory oversight and can earn an income as well.

In India, the regulatory compulsions for cab drivers to go through rigorous licensing simply do not exist.. Anyone can go through the RTO to get a commercial license, and get registered as a driver. That's it!! The core benefit is to the passenger, in that he/she doesn't have to wait alone for a cab driver, nor go through ridiculous negotiation on the price. In-addition, the car is available on-call, and is rather cost effective (at least as long as private investors keep pumping $$ into Uber). I'd be willing to bet, that Uber will not succeed in Mumbai, where you have a rather systematic cab & rickshaw process where passengers don't need to go through the kind of hoops that those of us in Pune and other towns have to go through.

However, calling itself a cab company will get Uber into needless hassles, something Uber has no need, nor the business model to sustain. There's no way an Uber could/would or even should, get in the business of background checks, especially in a country where there is an entire ocean of individuals who go nameless in the system, with no way to know their identity, their background, and where, regardless of what the paid hacks at Times Now say, we remain innocent until proven guilty. All Uber can do is provide the guarantee to comply with the law and hand over all relevant evidence for speedy resolution. That the law takes so long to work it's way around, has more to do with the legal system than with Uber. 

Thus, the positioning of Uber has to be more like an online market place, which it actually is, one where it plays more the role of getting the two individuals together to meet a mutual need. The passenger understands that they're getting into a contract with the driver, and Uber acts as the intermediary. When it comes to issues related to criminal law, Uber has the technology to trace the driver in a jiffy (which is what happened in this case, the guy got caught inside 48 hours, in Mathura all because he had the Android GPS on in the car). Actually, let me rephrase that. Uber has the technology to trace the driver AND the passenger who have been the co-signees of this contract. (The potential of a psychopath passenger slashing the neck of the driver is equally likely). 

It could also point out, given the significant sample size and grossly underreported tragedy called marital rape in India, no one is blaming Shaadi.com.

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