App Cabs- Algorithm vs People

Ryde, a new app-based cab aggregator has launched their service in Kolkata a couple of days back. This is the third such company to have launched in Kolkata in the last 4 years attempting to take some market share from Uber and Ola in Kolkata, capitalising mainly on customer frustrations, especially about surge pricing. None of the previous ones survived. Will Ryde be the one to make the market monopoly of the Big Two?

The problem is not fair pricing, there is a logic and algorithm that decides surge price. Surge price, I would argue, is fair, if the proceeds go the driver partners who spend more of their time and money (on fuel) on the road due to urban traffic snarls in rush hours or during rain. It is especially fair in the current atmosphere of surging fuel prices. However, despite their pocket pinching surge prices, Uber and Ola are far from profitability, so my question to Ryde, is how are they going to sustain the bleed if they want to be competitive in the price-wars and offer a flat rate with no surge pricing, which seems to be their USP. How are they going to sustain the burn in the long run?

I do not think the problem is pricing. By focusing on this to bring customer delight, we are beating around the wrong bush. The problem is reliability and empathy for the customers and for driver partners. For example: have you gone deep to find out why driver partners tend to refuse trips, long and short, at certain times of the day? Why do they refuse non-cash rides? Do you have enough insight about driver partner-car owner dynamics, which is often informed by the local culture and long standing, unwritten conventions? As an app-based ride hailing service, the driver partners are the main stay of your business, and if you do not figure out what makes them tick, then you have lost the game already. Uber and Ola do not do this research either, and if you want to level the playing field, you need to do what they are not doing, and do it with passion.

As someone who chats with Uber drivers frequently during long rides, I believe that the gap in customer delight is caused by trying to squeeze people into an existing algorithm, rather than trying to make an algorithm that fits the needs of the people- customers and driver partners you want to work with. They are people, like you and me, living, breathing, fallible, opinionated, argumentative, reasonable.

All the best to Ryde. Hope they will survive this very unequal fight with Ola and Uber. Hope they will bring true customer and driver partner delight.

Published by

Tathagata Neogi

Dr Tathagata Neogi is the Co-Founder and Chief Innovation Leader of Immersive Trails, a purpose-driven company based out of Kolkata, India that converts ethical, in-depth research into immersive experiences. Tathagata is a vocal advocate of empathic, ethical, community focused business practices.

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