Five years ago, every Venture Capitalist in the world immediately stopped listening when someone pitched them “Netflix, but for (insert industry)”. Today, VCs are equally driven to madness by the flagrant overutilization of Uber as a business model. To demonstrate how lazy this is, here are a few ideas that I came up with off the top of my head: Uber, except for lawnmowers. Uber, except for unlicensed acupuncturists. Uber, except for personal injury lawyers. App stores now overflow with systems designed to outsource labor in the most obnoxious way possible.
We’re all getting tired of hearing about the next industry to be Uberized, certainly, but let’s think back to what “Uberization” means, and why Uber worked so well in the first place. Uber didn’t start out as a service designed to get you in the back seat of someone’s smelly Toyota Corolla. It was, at the outset, exclusively a black car service (and was, I might add, a fair bit pricier than a taxi). Without Uber, these original drivers would still be driving black cars, but instead of using a slick app for appointments, ratings, and payments, they’d be using the yellow pages, or a dispatcher with much higher overhead.
Uber took existing contracted employees, and made it easier for them to find business. Using that as the foundation, Uber created new product categories, and created jobs that previously didn’t exist.
In contrast, “Uberization” usually involves getting non-professionals to rent out their property or services. These types of systems need to build their own community and infrastructure to even get off the ground. Not a winning business model.
Unlike those many Uber clones, Service is a lot more like the black car model. In many service fields, there’s already a bench of contractors available. Organizations need simply develop a system to connect them with the right customer under their own brand umbrella.
We know that there is a need for this among service firms. Aberdeen’s research has shown, year-after-year, that a key driver of technology investment in service is an aging and contracting technician base. The need to rethink the service workforce is growing, younger technicians are less likely to take salaried roles, and a technology infrastructure to connect equipment manufacturers, contractors, and customers could be the answer.
Of course, the risks in service are much higher than a car service. As an Uber passenger, I can step out of that smelly Corolla and give a driver one star, but my hot water heater, my HVAC system, and my toilet aren’t going to drive away after an unpleasant service visit. On the other hand, if a manufacturer can build a cheap, readily available on-demand fleet of approved contractors, they can cut internal staff (or manage their shrinking workforce), provide a better experience to customers, and dramatically increase the oversight that they have when problems arise with their products.
Let’s unpack this with an example:
As a manufacturer of a specific product or service, you have three options for how you manage service when things go wrong:
- Do nothing
- Manage and dispatch an internal fleet
- Partner with approved contractors
While doing nothing is a wonderfully affordable option, it certainly doesn’t provide a positive perception of your brand to your customer. On the other extreme end, an internal fleet requires salaries, equipment, and routing, and is marred by the woes of workforce management. Contractors solve many of those problems, but offer broad liability for how your brand is perceived with the client, and zero oversight into how service is delivered.
An Uberized approach can merge internal and external staff in a way that builds brand recognition. With such an approach, customers can use your app to schedule a service appointment when something goes wrong (or, if combined with internal sensors, before something goes wrong). That technician could be internal, a contractor, or your workforce could blend the two groups. You are managing costs while maintaining oversight of your service staff.
We’re using the example of product delivery, here, but as the service workforce begins to decline, an Uber-like approach to service becomes more viable in fields like telecommunications, energy, and so on (with, of course, the appropriate regulatory oversight).
People are increasingly sticking their nose up at the Uberizing of everything under the sun, but I’d say, if you’re a manufacturer who wants to keep your customers, and you haven’t thought about service previously, this approach might revolutionize your business. Customers have more access to options and information about your — and your competitor’s — product than ever before. When something goes wrong, do you want them calling an unlicensed contractor? Or consider a competitor for a replacement?
Or, should they be able to contact you, perhaps through a mobile app, and call upon an approved contractor that you can see, rate, and manage? I think the answer is clear, the business case is there, and it’s time for service to consider new ways to manage the contingent workforce.