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At a company event on Thursday in San Francisco, ride-hailing giant Uber unveiled a wide range of changes that are coming to its products and services. The changes appear to be aimed at helping Uber overcome the immense scrutiny it's gotten, especially over the last quarter, as the viability of its business model continues to be questioned.
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While Uber chalked up around $4.2 billion of its record $5.2 billion Q2 2019 losses to expenses surrounding its initial public offering, the remaining $1 billion was still a 14% increase from the $878 million it lost in Q2 2018.
Here are the three biggest things we learned about how Uber plans to overcome scrutiny and eventually reach profitability.
Uber wants to be a Western super app.
A redesigned Uber app will feature Rides, Eats, and future services side-by-side on the main screen. The new design, which is being tested in hundreds of US and international cities, gives users easy access to Uber's growing number of services. Rather than having separate apps for ride-hailing and food delivery, or having to toggle through screens to find the service they need, consumers will have options presented to them on one screen as soon as they open the app.
This is in the same vein as super apps found in Asia. On WeChat, for example, users can share messages, send photos, shop online, schedule transportation through ride-hailing services, order food, and even book doctors' appointments. The super app goal was supported by comments from Uber CEO Dara Khosrowshahi, who according to TechCrunch stated that Uber wants to be "the operating system for your everyday life" and "a one-click gateway to everything that Uber can offer you."
Here are some of the updates Uber is making to its service to support its evolution into a super app.
- Uber is becoming a one-stop shop for all things transportation, even if it means showing non-Uber services. Starting in October, Uber will show bikes and scooters on the map inside the Uber app, whether or not they are Uber's. The company is also expanding its in-app Transit option, which gives users real-time public transportation information, to 10 more cities across the globe.
- The company is continuing to build out its Uber Eats food delivery service through high-profile partnerships and user customization features. In partnership with Rachael Ray, Uber Eats users will get access to the chef's first-ever restaurant. The delivery-only restaurant will be available exclusively via Uber Eats in 10 cities over 10 weeks, coinciding with the launch of Ray's new cookbook. The company also entered an exclusive partnership with salad chain Sweetgreen. Beyond the partnerships, Uber Eats is adding an allergy-friendly filter, which makes it easier for consumers to share their dietary restrictions with restaurants directly through the app.
- Uber is expanding Uber Rewards, a loyalty program that offers points for spending on rides and Uber Eats, complementing the company's other payment-related offerings. US Uber Rewards members can now earn points for every Uber ride or Uber Eats delivery, which they can redeem for new rewards such as $0 delivery fee on Uber Eats orders or free items from partners like McDonald's. Uber is also extending the rewards program globally so US users can earn points while traveling. Adding a loyalty component can help Uber onboard customers to its other payment services. The company has been working to diversify its payment options and launch payment services, which includes the launch of Uber Cash, a service that allows customers to add funds to a stored-value account which they can use to pay for Uber services, offering a 5% discount and incentives.
Uber also has a number of other ventures that it could one day incorporate into its main app. The company didn't mention Uber Health or Uber Freight at the event, but they are prime candidates to round out its super app offerings. For example, while Uber Health currently works with payers and providers to schedule transportation for patients, Uber could one day integrate an appointment scheduling feature directly into its app in partnership with a company like Zocdoc or major health systems.
Security is a priority.
In the ultracompetitive ride-hailing industry, rider safety issues can have a significant impact on consumer confidence, which can hurt ridership. In a poll of 3,000 riders, 81% of respondents stated that safety was the prime factor when choosing between using a taxi or a ride-hailing service, according to FrederickPolls data cited by WTOP. While Uber has introduced a number of safety features in the past, security was a focal point of this year's event.
This is unsurprising, considering that the company has recently drawn the ire of the public for some of its practices: The Washington Post reported that Uber investigators were encouraged to protect the company, rather than complainants who in some cases made serious allegations against drivers — a claim that Uber has denied. Unfortunately, I don't think some of the features go far enough in securing the safety of riders.
- Riders can now verify their rides by choosing to receive a unique four-digit PIN that they provide to drivers, who must enter the code in their app to start the trip. Uber also says it's working on using new technology that leverages ultrasound waves to verify that a user is in the right car, eliminating the need for a PIN. While these features could help reduce confusion when it comes to getting in the wrong Uber, they wouldn't necessarily stop bad actors even when they have the right person in the vehicle.
- Uber will soon allow riders to report issues while they are still on their trips, rather than having to wait until the ride is over. In the Uber app, riders will see a "Report Safety Incident" option through which they can report safety issues, which will be sent to Uber's safety team who will follow up after the trip. But this also doesn't go far enough, as safety teams can't address issues in real-time.
- Perhaps the best update to Uber's safety feature is the ability to text 911. Uber is adding an option that allows users to send a text message to 911 — limited to areas that support the technology — which will automatically include trip details such as the vehicle's make, model, license plate, and location. For riders, knowing that they can discreetly and quickly communicate to authorities the information necessary to track them down in an emergency will likely be a comforting though.
Drivers and couriers get new tools, but not benefits.
It's no secret that Uber has been under heavy criticism for the way it classifies its workers. Like many other ride-hailing and crowdsourced delivery providers, Uber categorizes its drivers as contract workers, allowing the company to skirt laws that would impose a minimum wage and require employee benefits such as health insurance. This has not only led to pressure from regulators, but also from drivers who have taken to strikes to voice their concerns.
But for Uber, which is already struggling to find an avenue toward profitability, increasing wages and providing benefits would only eat further into its services' already tight margins. To quell concerns in the meantime, the company is introducing a number of features that increase transparency and income potential for drivers. This could help Uber keep drivers from jumping to rival apps, but it still falls short of appeasing the bigger concerns of either regulators or drivers.
Here are the features Uber announced for drivers and couriers:
- Drivers are getting an earnings estimator and a Demand Heatmap, which are designed for improved transparency. The earnings estimator will give drivers more visibility into how much they can potentially earn from being on the platform, even before they ever make a trip. Having access to this information will help drivers decide if Uber is the right platform for them, reducing the possibility of dissatisfaction. The Demand Heatmap highlights areas where riders are requesting trips. This could help drivers maximize their profit potential by migrating to high-use areas.
- While Uber didn't provide any updates to potential benefits, like healthcare, it did say it's looking for ways to create more opportunities to reward drivers. The mobility giant highlighted that the Uber Pro program, which gives drivers rewards like tuition coverage at ASU Online, is on track to hit 3 million users by the end of 2019. Uber plans to bring Uber Pro to more countries, including the UK and Brazil.
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