After much reading about the disruptive the power of Uber to transform the transportation industry, I finally have the opportunity to feel it at first-hand after taking a ride with the service.
Hailing a Uber car is a breeze. Just whip out your handphone, key in your request and soon a private car will arrive to pick you up. While the short waiting time is a surprise, it is the final bill that will cheer the heart. Instead of paying through the roof with a fixed base charge and other surcharges in the cities, the fare is pretty inexpensive during non-peak hours. To add to the joys, there are more tempting promotions to entice us to come back for more benefits.
For this, consumers have to thank Uber's powerful loyalty program that keeps on churning out promotions after promotions for using its service. While these monetary benefits are music to the consumers, they can be catastrophic for the incumbents.
The scene on the road is not pretty as many empty cabs are cruising the road while their potential passengers are using their phones to book a Uber's cab.This change of consumers' habits can have grave implications as it can hit cab drivers' take-home earnings drastically: from booking fee, high base charge, and fewer consumers.
Despite this enormous threat from Uber, the renting company's inertia to change is still amazing strong: No mobile app, same rental fee, rigid base charge, booking fee, many surcharges and no promotion. No wonder, cab drivers are protesting or transforming themselves into Uber's drivers.
To limit the damage, some affected rental companies are substantially lowering car rental rate to match Uber. As for the rest, they are still adopting a wait-and-see attitude. While lowering leasing cost is welcomed, it is still wholly inadequate to compete with Uber. To do that, it requires a dramatic mentality's shift to embrace shared wins for consumers, customers, and the company.
This will be the hardest aspect of the transformation as it departs greatly from focusing on own bottom line and shareholder's benefits. Continuously to go down this path amid the strong Uber's challenge and changing consumers' behaviours will also be disastrous for the renting company and their stakeholders.
To add to the incumbents' miseries, this shared benefit alone is still insufficient as there are other Uber's comparative advantages that collectively provides the company with the STAR competitive advantage. This STAR quality will be discussed in my next book that is expected to released in 3rd or 4th quarter of this 2017.