1. People Prefer Upfront Prices
By now, every contractor should know the advantages of flat rate pricing. Uber proves them all over again in a completely different industry. People prefer Uber’s upfront pricing approach over the uncertainty of metered cabs, even though the cabs cost less.
For the umpteenth time, if you are not flat rate, start. Now. Your customers prefer it. You can make more money with flat rate. Do it.
2. Prices Can Be Raised With High Demand
Uber has been decried for price gouging because prices go up during snowstorms, New Year’s Day, and other times when more money is required to lure drivers from cozy homes into inclement weather. It’s basic economics. If demand exceeds supply, prices must rise or shortages will occur. It’s stunning that so many people cannot understand this (e.g., New York’s Attorney General).
Travis Kalanick, Uber’s CEO explained, “Higher prices are required in order to get cars on the road and keep them on the road during the busiest times. This maximizes the number of trips and minimizes the number of people stranded. The drivers have other options as well. In short, without Surge Pricing, there would be no car available at all.”
This is a lesson many contractors should learn. When temperatures are extreme and you have more calls than you can handle, raise your response charge. When it’s so mild you are sending techs home, consider dropping the response charge altogether.
3. Informed People are More Patient
One of the cool things about Uber is the app gives you GPS tracking of the car that will pick you up. It makes a ten minute wait far more bearable when you can track progress. Without the app, it would take less than five minutes before you would wonder if the driver changed his mind or forgot about you.
Think about your customers. Do you give people a four hour window? You can do better than that. Keep them informed. Get their mobile phone number and send text messages with status updates.
4. Appearance Matters
Anyone who’s ridden in metropolitan area cab, know that appearance isn’t high on the list. The cabs are dingy. The drivers are worse. No so with Uber. The vehicles are spotless and the drivers are presentable and friendly. This is generating preference vis-à-vis traditional cabs.
Keeping your trucks clean and your techs in uniform can give your company preference over other contractors. Touch up the wraps. Fix the dings. Ban blue jeans. Tuck in shirts.
5. Background Checks Matter
Does it feel creepy, jumping into a stranger’s car for a trip across town? Uber conducts thorough background checks on their drives and hypes the fact. People feel safer with Uber than the cab company.
Many states are starting to require background checks from contractors, though the public is largely unaware of this fact. Conduct background checks and promote it. State the criteria you use for excluding someone.
6. Better Service is Worth a Premium Price
Uber’s black car and SUV services are not price competitive with cabs. People willingly pay more because the service is perceived to be better. People will pay more for your company if they perceive the service is better, the reliability is greater, the interactions are more pleasant, and so on.
7. Markets are Smarter than Regulators
Everywhere it’s offered, Uber runs into entrenched interests that have erected regulatory barriers to entry, similar to HVAC occupational licensing found in most states. Uber has continued to find a way around, through, over, or under the red tape. In the long run, markets always prevail over anti-competitive actions of governments. Even totalitarian states have black markets (and would probably collapse without them).
Occupational licensing is an anti-competitive action of government. Contractors who get obsessed with unlicensed competition will never eliminate it. They will lose focus on growing their own businesses by focusing on the suppression of minor competition. It’s far better to focus on their own companies.
8. You Can Collect Immediately
If you use Uber, your credit card is on file and you get dinged at the time service is delivered. The tip is included. No cash changes hands. Today a credit or debit card is necessary to buy a plane ticket, to rent a car, and generally to function in society. People are not offended by a request for a credit card. They expect it.
Get a credit card number before dispatching a technician. Get paid when the service is delivered.
9. You Can Charge for Cancellations
Call Uber, request a car, and change your mind five minutes later and you will get hit with a cancellation charge (remember, they’ve got your credit card). Of course, if the car is more than five minutes late, you can cancel without penalty.
How many times have you dispatched a technician to an empty house? Or, to or one where the homeowners aren’t answering the door? Or, to one where a competitor’s truck is parked in front. Charge your dispatch fee prior to sending the technician and this problem is solved. Credit the fee to the diagnostic or repair if necessary. It’s expensive to send a fully stocked service vehicle and professional technician to a home. The dispatch fee (or service call charge) may not fully offset it, but it does offer something.
10. Choices Are Preferred
Uber started with its black car service and added SUVs. Both cost more than the local cab company. Because some people wanted lower price options, Uber added UberX, featuring compact cars
People like choices. When replacing HVAC equipment, they will get choices. They can get them from you or they can get them by calling your competition. You choose what to offer.
11. Ratings and Reviews are Trusted
Uber boots drivers when their ratings drop. This results in drivers near begging people for five star reviews, leading to rating inflation. Nevertheless, people trust reviews and ratings from previous passengers they do not know. Inflated or not, the ratings provide more reassurance than the lack of ratings with a licensed cab.
Ratings and reviews are the new currency of trust for first time customers. If you are not doing all you can to encourage reviews of your company on Google, Yelp!,Angie’s List, and other sites, you are costing yourself future business.
12. Smart Business
Uber is not rocket science. It’s a software driven service. Its foundation is smart business decisions that are resulting in very rapid growth. These are smart business decisions service contractors would be wise to replicate.