The customer in the driver’s seat: Optimize customer experience through freedom of choice

This article is based on a presentation given by Adam at our Customer Success Festival in Boston 2023.

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Optimizing customer experience through freedom of choice has been a transformative adventure for both our company and our users. 

I'm Adam Warner, Operations Strategy Director at inDrive, where we challenge the conventional ride-sharing model to prioritize what truly matters: choice and fairness. 

Our approach has led us down a path of innovation, learning, and, most importantly, listening to the diverse voices of our customers. 

In this article, I'll share the insights and strategies that have guided us in creating a platform that not only meets but anticipates the needs and preferences of our users, setting a new standard for customer service in the process.

The power of customer choice in enhancing CX

My role at inDrive encompasses managing our customer support team and various operational channels, offering me a unique perspective on the intricacies of customer service. I'm excited to share insights into how optimizing customer experience (CX) through freedom of choice can significantly benefit your organization.

inDrive has been a player in the ride-sharing industry for over a decade, though our name might be new to some. Our mission is simple yet profound: to optimize the customer experience by empowering our users with the freedom to make choices that best suit their needs. 

This approach is not just a philosophy; it's a practical strategy we implement daily to address the diverse needs of our two primary customer groups: drivers and passengers.

In the ride-sharing ecosystem, drivers and passengers present two distinct sets of challenges that need to be addressed thoughtfully and effectively.

Drivers

Our drivers, who use their vehicles, gas, and money for service and maintenance, face increasing pressures from rising commissions and operational costs. This financial strain makes it imperative for us to support and empower this disenfranchised group, ensuring they can work efficiently and profitably.

Passengers

On the flip side, our passengers frequently grapple with surge pricing, which can transform an anticipated $10-$15 ride into an unexpectedly steep $40-$60 charge.

For those relying on ride-sharing as their primary mode of transportation, especially in cities like New York where owning a car is impractical, this pricing volatility is a significant concern.

At inDrive, we believe that the key to resolving these challenges lies in offering freedom of choice to both drivers and passengers. By allowing both groups to make informed decisions that align with their preferences and needs, we can create a more balanced, equitable, and satisfying experience for everyone involved.

The genesis of inDrive: A response to surge pricing

The story of inDrive is not just a business case; it's a narrative about innovation born from necessity and community spirit. 

It all began on a frigid New Year's Eve in 2012, in a small Siberian town where temperatures plummeted to -49˚F. As the local populace celebrated, the town's taxi services saw an opportunity to capitalize on the harsh weather and the festive spirit by significantly raising their fares. 

This early instance of surge pricing left many party-goers stranded and frustrated, marking a moment that would inadvertently spark a revolution in ride-sharing.

Our founders, among those affected by the inflated taxi rates, were inspired to create a solution that would prevent such exploitation. They turned to Facebook, where they initiated a social media campaign to facilitate ride-sharing at negotiated, fair prices. 

This platform allowed individuals to post their travel needs and proposed fares, connecting them with drivers willing to accept these terms. This innovative approach to ride-sharing, based on direct negotiation and mutual agreement, laid the foundation for what inDrive would become.

Fast forward to the present, inDrive has transformed from a grassroots initiative into a global mobility and urban services platform. Despite our significant growth, many in the United States may not yet be familiar with our name. 

Our journey from a small Siberian town to an international presence in nearly 48 countries is a testament to our commitment to providing equitable and flexible ride-sharing options. Our recent establishment of headquarters in Mountain View, California, and our launch in Miami signify our exciting expansion into the U.S. market.

Our origins are deeply rooted in the principle of fairness and choice, challenging the status quo of ride-sharing economics. By empowering both drivers and passengers to negotiate terms that work best for them, inDrive stands as a pioneering force for change in the industry. 

As we continue to grow and enter new markets, our mission remains the same: to offer a ride-sharing experience that prioritizes the needs and preferences of our community. Join us as we explore the impact of this philosophy on the future of urban mobility.

Embracing freedom of choice across verticals

As we delve deeper into the ethos of inDrive, it's crucial to understand that our commitment to freedom of choice extends far beyond the realm of ride-sharing. 

This foundational principle has guided us to explore and innovate within five additional verticals, applying the same philosophy to foster real peer-to-peer interactions across various marketplaces.

With over 180 million app downloads worldwide and a team of more than 3,000 employees spread across 20 offices, inDrive's presence on the global stage is undeniable. 

While Uber has undoubtedly revolutionized how we perceive and utilize ride-sharing services, becoming a staple in the lives of many, including myself, inDrive is proud to stand as the second-ranked app across all app stores. This achievement is a testament to our relentless pursuit of building a global brand that prioritizes making a meaningful impact in the communities we serve.

Our approach to business is deeply intertwined with a commitment to social justice, particularly in addressing the pay inequity gap prevalent in many of the emerging markets we operate in, such as the Philippines, Malaysia, and Peru. 

Our founders are passionately dedicated to challenging injustices and enhancing the customer journey for all individuals — drivers and passengers alike. This dedication is evident in every facet of our operations, from the design of our app to the strategic decisions we make to expand our services.

At inDrive, we constantly seek opportunities to make the most significant impact, always considering the communities our customers belong to and how we can serve them and the broader community positively. 

Tackling local challenges, especially those related to income inequality and the pay gap, is at the forefront of our mission. In the United States and across our global markets, we aim to bridge these divides, offering solutions that empower our users and promote fairness.

The concept of freedom of choice is not just a recurring theme in our discussions; it's the cornerstone of our mission. It represents our commitment to empowering customers and brands alike, ensuring that every interaction with inDrive is characterized by autonomy, fairness, and the opportunity to make choices that align with individual needs and preferences. 

As we continue to navigate the complexities of the markets we serve, this principle guides our efforts to innovate and provide services that not only meet but exceed the expectations of our diverse user base.

The economic challenges of ride-sharing

In the world of ride-sharing, the economic model presents significant challenges for both drivers and passengers. A startling reality is that almost 60% of the fare paid by passengers is absorbed by platform fees, leaving drivers with a mere 40% of the earnings. 

This disproportionate distribution of income is a growing concern within our community, as it directly impacts those who provide these essential services. The high level of disengagement among drivers is a clear indicator of the urgency with which we need to address this issue.

For passengers, the sting of surge pricing during peak times or after events is all too familiar. The experience of paying a reasonable fare to arrive at an event, only to be met with exorbitant prices for the return journey, is universally disliked. 

This practice not only frustrates passengers but also contradicts our mission to provide fair and accessible transportation options for everyone. It's a scenario I find unacceptable, both as a provider and a user of ride-sharing services.

To compound the complexity of the ride-sharing economy, there's a heavy reliance on incentives to balance supply and demand. Drivers are often enticed with bonuses, such as an additional $500 for completing a certain number of rides within a specified period. 

Similarly, passengers are frequently offered discounts to encourage the use of the service. While these incentives are designed to stimulate engagement, they create a challenging environment for scaling the business sustainably. 

Both drivers and passengers ultimately bear the brunt of this unsustainable model, which is far from lean and efficient.

The current state of the ride-sharing economy highlights the need for a paradigm shift. The traditional model, characterized by high platform fees, surge pricing, and an over-reliance on incentives, is not only unsustainable but also detrimental to the very stakeholders it aims to serve. 

As we move forward, our focus must be on developing innovative solutions that address these core issues, ensuring a fair, equitable, and sustainable ride-sharing ecosystem for all.

Revolutionizing ride-sharing with freedom of choice

Let it be known that the ride-sharing marketplace is pretty crowded; there’s a lot of competition out there But where inDrive stands out is in its transformative approach centered around a fair and transparent pricing model. This model is not just a feature of our app; it's the embodiment of our core philosophy: freedom of choice. 

Let me walk you through how this principle is applied in practice, fundamentally altering the ride-sharing experience for both drivers and passengers.

Imagine landing at Logan Airport and needing a ride to the Intercontinental. Through the inDrive app, you have the power to declare, "I'm Adam, and I'm willing to pay $20 for this ride." This simple act of setting your fare upfront flips the traditional ride-sharing model on its head. Instead of being subject to opaque surge pricing and algorithm-determined fares, you directly communicate your offer to the driver community.

Our system broadcasts your offer to all nearby drivers, who then have the freedom to accept your bid or propose an adjusted fare based on their circumstances, such as operating a larger or more luxurious vehicle. This negotiation process results in several bids from drivers, empowering you, the passenger, to choose based on factors that matter most to you —be it price, the type of car, or the driver's proximity.

This model of direct negotiation and choice creates a personalized customer journey, allowing both drivers and passengers to have a say in their ride-sharing experience. It's a concept that has shown promising results in the United States, challenging the status quo of the industry.

Sure, we’re up against giants like Uber and Lyft, but inDrive carves out its niche by eschewing the traditional reliance on incentives to attract users. Instead of purchasing loyalty, we offer the intrinsic value of choice. This approach not only appeals to users' desire for control and fairness but also aligns with our commitment to ensuring drivers receive equitable compensation for their services.

We don't manipulate supply and demand with algorithms or impose rides on drivers. Our platform is designed to respect the autonomy of our users, maintaining low commissions to ensure that drivers are fairly compensated for their work. This commitment to fairness and transparency is what sets inDrive apart in a competitive industry.

At inDrive, our mission goes beyond providing a service; it's about fostering a community where every member feels valued, respected, and part of a fair exchange. We believe that by offering freedom of choice, we not only enhance the ride-sharing experience but also contribute to a more equitable and just industry. 

This principle of choice is what guides our decisions, our interactions with customers, and our vision for the future of urban mobility.

The success of inDrive in the United States

As inDrive's journey unfolds in the United States, the reception to our model of negotiated fares has been overwhelmingly positive. A common concern among new users is the potential delay in agreeing on a price.

However, our platform's efficiency shatters this misconception, with the process from order to acceptance averaging just about 10 seconds. This rapid response time is a testament to our platform's design, which prioritizes user convenience and satisfaction above all else.

I want to circle back to the importance of choice in the customer experience. This concept might seem a bit removed from the usual topics of conversation at industry events, but it's fundamental to understanding the shift we're advocating for in the ride-sharing sector and beyond. 

The ability to choose, negotiate, and feel in control of one's decisions is not just a feature of our app; it's a principle that can transform industries.

In line with the reflective questions we've explored, such as starting with "why" and working backward to create impactful customer experiences, inDrive's mission is deeply rooted in the belief that giving people options is the key to building successful, sustainable businesses. 

This belief guides our interactions with customers and shapes the relationships we build, ensuring that every decision we make contributes to a more equitable and user-centric service.

As we look to the future, our goal is to continue championing the choice model across all our services, with the ambitious aim of impacting a billion people by 2030. This vision is not just about expanding our user base; it's about fundamentally changing how people interact with technology, services, and each other. 

By steadfastly focusing on providing freedom of choice, we are committed to optimizing the customer experience in ways that resonate deeply with our users' needs and values.

To everyone reading this, whether you're a part of the inDrive community or just learning about us, I invite you to consider how freedom of choice can play a role in your life and work. How can offering more options and fostering negotiation lead to better outcomes for your customers, your teams, and your organizations? 

As we continue to grow and evolve, let's keep these questions at the forefront of our minds, driving us toward a future where choice is not just an option but a standard.

Q&A

As inDrive operates in over 40 countries, how do you account for cultural differences and business practices in these diverse markets?

Understanding and respecting cultural nuances and business practices is crucial for our success in each new market. Entering the United States, for example, highlighted the importance of adapting to local regulations, which are significantly stricter compared to other parts of the world. The requirements for Transportation Network Company (TNC) licensing and insurance for gig economy work are particularly stringent here.

To illustrate, Uber's expenditure on insurance last year amounted to $6 billion globally, with $5.4 billion of that spent within the United States alone. This stark difference underscores the necessity of thorough research and preparation before entering a new market.

Our approach involves extensive research and a deep dive into local regulations, costs, and expectations. Unlike many companies that may start in a less regulated environment and expand outward, we often find ourselves navigating from less regulated markets to more complex ones, encountering what you might call 'sticker shock' due to higher expenses and stricter standards.

Success in both emerging and developed markets hinges on our commitment to detailed research, open communication, and a genuine effort to understand and integrate into the local business ecosystem. Asking the right questions and being prepared to adapt our operations and communication strategies are fundamental to our ability to thrive in diverse global landscapes.

As we're considering monetizing our customer service offering, your model of letting the market set the pricing intrigued me. I'm trying to figure out how we might apply this in a software company context, possibly through our partner-driven sales model. Do you have insights on applying a "name your price" model to services or resources beyond software licenses?

It's fascinating to consider the breadth of applications for a "name your price" model across various industries, including software. At inDrive, we're exploring this concept in other verticals, such as handyman services. For example, a customer needing a bathtub installation can state their price, and service providers in the marketplace can respond in real time, allowing for direct negotiation.

This model is about creating marketplaces that don't dictate prices but rather facilitate connections between service providers and customers, enabling them to find mutually agreeable terms. The potential for software companies lies in providing options and flexibility to clients, which can be a powerful differentiator.

We're continuously exploring how to expand these principles to other services, including how they might be applied in the software industry to enhance customer and partner engagement. While it's a challenging endeavor that often keeps me up at night, I believe there's significant potential to innovate and compete more effectively by offering such flexibility.

I'm eager to further explore and develop these ideas, potentially collaborating with others in the industry to push this concept forward. It's an exciting area with a lot of room for growth and innovation, and I look forward to seeing how we can apply these principles more broadly to benefit customers and partners alike.

From the perspective of drivers, how does inDrive help them predict and ensure their revenue, making it a profitable venture for them to continue driving?

Addressing driver profitability is central to our value proposition at inDrive. Unlike the traditional models employed by major ride-sharing companies, which can take up to 60% in commissions, inDrive maintains a significantly lower platform fee. 

Globally, we charge about 10% of the ride's cost, which is a stark contrast to the industry standard. In the United States, we anticipate this fee might increase to around 20% to align with the unit economics specific to this market. However, it remains substantially lower than what drivers have been accustomed to.

This approach is fundamentally about offering a fair deal to drivers. Our entry into new markets, such as Miami, has been met with overwhelming enthusiasm from the driver community. Initially, we hoped to onboard 3,000 drivers as our target for Miami, but astonishingly, we surpassed this goal, reaching over 18,000 drivers within just two months. 

This success is not about our efforts alone but speaks volumes about the current market dynamics and the demand for a more equitable ride-sharing model.

The significant driver sign-up rate underscores a broader dissatisfaction within the driver community towards the existing market leaders, Uber and Lyft, especially as these companies face pressure to deliver profits to their shareholders. 

This environment creates a ripe opportunity for inDrive to introduce a model that prioritizes the needs and welfare of drivers.

Our commitment is to listen to our drivers, understand their needs, and develop products and services that genuinely serve them. This approach is not just about being another player in the ride-sharing market; it's about redefining the relationship between ride-sharing platforms and their drivers. 

As we move forward, our goal is to maintain this focus, ensuring that inDrive continues to be a platform where drivers can not only earn a fair wage but also feel valued and heard.

Traditional sales training suggests minimizing options for customers to prevent decision paralysis. Do you find that increasing the price range affects the negotiation time? And, when presenting options, do consumers focus on a few key factors, similar to how one might prioritize ratings on Amazon?

Your observations align closely with our experiences at inDrive. As users engage with our platform, we indeed notice patterns in their preferences, which guide their decisions in a way that's most comfortable for them. 

For instance, in Miami, I personally lean towards choosing the nicest car available, like a Tesla, because it suggests a certain level of care from the driver. Others might prioritize vehicle size, opting for an SUV for additional space.

This diversity in user preferences enriches our customer data, offering insights into consumer behavior that were previously unknown to us. Interestingly, despite the freedom to negotiate, the process from start to finish is remarkably swift, averaging just 10 to 12 seconds. 

This efficiency is partly due to our approach of suggesting a recommended price based on typical fares for the journey. This recommendation serves as a guideline, ensuring that offers remain realistic and fair, preventing scenarios where a customer might significantly underbid.

The marketplace's self-regulating nature is a fascinating aspect of our model. It ensures that transactions remain balanced and fair, guided by mutual agreement rather than unilateral decisions. 

The wealth of data we're gathering is incredibly valuable, and I'm eager to see what additional insights the next six months will bring, especially as we prepare to expand into new cities in the United States. 

This ongoing learning process is crucial for us to understand and adapt to consumer preferences, ensuring that inDrive continues to meet and exceed the expectations of our users.