(Image source: Verge Campus)
We are good at talking about grave business mistakes: Broken products, failure to meet customers' expectations, and bad customer experience among others.
But we are bad at noticing smaller—but far bigger—business mistakes, small but mightier business sins that could drive our companies to death.
Earlier this year, one of the top companies in the ride-hailing industry Uber has committed one of these smaller but mightier capital mistakes, when it increases its fare prices in the wake of the protest challenging President Trump's controversial policy—banning Muslims from entering the US.
The company faced attacks and sparked a movement, which led to the creation of a trending hashtag # deleteUber, where thousands of people requested the company to cancel their accounts.
Let's look at how the story unfolds and discuss the three lessons I learned from this episode.
How does the #deleteUber campaign start?
It all started after Uber decided to raise its transport fares to profit from the protest against President Trump's travel ban in New York.
And it's a wrong business move. Because shortly after the price surge, smart Internet-empowered users called the attention of their peers on Twitter; thus sparking a new #deleteUber campaign. The hashtag becomes a movement.
Many Twitter users, mostly Uber's drivers and riders, began boycotting the company and taking a stern decision to delete their account altogether, in what they see as Uber's callous, insensitive decision to turn crisis into a profit.
Upon realizing the growing nature of the attacks, coming from people all over the world, Uber did two things:
- It turned off the "price surge feature" and;
- Refused to grant people's request to cancel their accounts
Yet, people became angrier, and continued to attack the multi-billion dollar company for its wrong move. In fact, the move had caused Uber its customers, credibility, and revenue.
How does the price surge affect Uber?
It affected it badly.
First, the decision provoked many people into taking a fierce decision to cancel their Uber account. The New York Times, for example, reported that about 500, 000 users requested to delete their account in the week after the travel ban protest.
"About half a million people requested deleting their Uber accounts over the course of that week, according to three people familiar with the company's internal metrics who asked not to be named because the numbers are confidential."
Every day on Twitter, new users would ask Uber to delete their account on date related to Uber's price surge fiasco as the Trump's Muslim ban protest escalated.
That's a big problem that no business wants to encounter.
Also, more users discussed leaving Uber and joining Lyft. Crimson Hexagon reported that before the #deleteUber campaign, people talking about joining Uber had 85 percent share of the conversation on Twitter.
However, after the campaign, the number dropped: Joining Lyft had 84 percent share of the conversation.
The point is, what can we learn from this debacle?
The top 3 lessons learned from the #deleteUber campaign
Here are the top three business lessons I learned from the #deleteUber campaign:
1. Don't turn problems into avenues for making profits.
Uber saw a problem and with it a big business opportunity. The Trump's Muslim ban, which caused many protesters to occupy roads and runways at the John F Kennedy airport, means that traffic jam would increase, as many people stormed the airport and roads leading to it. A price surge from a transport company; therefore, equals increasing revenue. And it's true; however, it's bad for business.
Lesson #1 : A good business should turn problems into business ideas, ideas into avenues for making profits, and not the other way round.
2. Your consumers are smarter than you think.
You might think that you can outsmart your clients, consumers, and customers.
You might think that your marketing team—a group of high-profile execs with MBAs from Harvard—are smarter than your average customer—a common man with no college degree.
You might further think that you can use a political crisis to up your prices for your riders (because the riders won't notice, right?).
Well, they'll notice…because the truth is, your consumers are smarter than you think. Less than half an hour after Uber increased its fairs, one Twitter user, @Bro_Pair, realized the company's rationale behind that and quickly broadcasted the news to its followers, which spread like wildfire, and uncovered Uber's daft decision.
Lesson #2 : Your customers are smarter than you think. Respect them; treat them with high regards.
3. Businesses solve problems (not compound them).
Look at any great business and notice how it's solving a big problem in our lives. For example, Facebook is simplifying how we interact with our friends, colleagues, families and loved ones.
Amazon is solving the gaps in retailing. By building "the everything store" on the web, anyone can buy anything online with a simple click.
Airbnb is solving the huge price tag bedeviling the hospitability industry, making it possible for people to not only afford hotel rooms but build startups out of their apartments.
When Uber tried to capitalize on an existing political outcry, it reversed its decision, after facing grave consequences.
Lesson #3 : Always try solving a problem with your new products and services, and not the other way round.
You don't make a profit by compounding political protests in your community with your product. You make money by easing the life of the people in your community. For, as Zig Ziglar puts it, "You can have everything in life you want if you will just help other people get what they want."