Two cents blog

Is ‘Community’ the new ‘Brand’?

by Paul Cornwell on 1 October 2014

Think for a moment about some of the world’s largest & fastest growing brands these days and you’re likely to come up with names like Ebay, Facebook, Tripadvisor, Instagram, Twitter and now AirBnB and Uber.

They’re not traditional products pushed out to consumers via traditional marketing programs.

No, they’re communities of like-minded people who connected with each other around an idea.

ebay-logo

With Ebay they liked the idea of buying and selling goods to each other without a retailer between them.

airbnb-logo

Now AirBnB has skirted around the traditional hotel infrastructure and booking systems and travellers have gathered around the concept of renting a room or apartment directly from the owner.

uber-logo

One of the more recent names to emerge is Uber.   This concept has exploded in recent months with people under 30 rallying around the idea of connecting directly with an owner/driver in their private vehicle to take them home after a night out.

Often the more traditional businesses in a particular category are slow to react to these new entrants. So, let’s examine the taxi category and specifically on the key operator Yellow Cabs.

yellowcab-logo(2)

Yellow Cabs have taxis in Brisbane, Hobart, Yeppoon, Warwick and Rockhampton so they have lots of critical mass – and history too. The company has 1200 vehicles doing over 12 million jobs annually.  A truly great success story.

Like many businesses Yellow Cabs has seen off challenges from competitors and weathered many changing market conditions. But are they now faced with a category game-changer like they’ve never seen before?

Why are the Gen X and Y’s flocking to Uber? And what can Yellow Cabs do about it?

  • For a start, it’s cheaper. A $25 cab fare is often as cheap as $15 or less with Uber.
  • It is more service focused with drivers rated by users and dropped if they don’t perform.  Imagine if cab drivers were put to this test? Some would thrive but many would be without a job.
  • It is more personal. The driver picks you up in their own private vehicle for a start. They introduce themselves via a txt before they arrive to pick you up.
  • They’re more motivated.  It’s an owner/driver who picks you up and they have a personal interest in your experience and how you rate it.  Many cab drivers are not owners and as such are not particularly incentivised to look after you or have a clean cab etc.
  • Apparently the drivers earn more per fare which means they’re happier with their job.
  • There is no transaction with each ride so the payment happens via the app and your credit card or Paypal.  No more getting stranded because you’re out of cash.  And no more runners either!!
  • Uber drivers are put through rigorous security checks before being allowed on the road and safety standards are a key part of the Uber offer.
  • And one of the keys to Uber’s success I believe is that it’s app based and the app is very very good.  Bookings are simple and the driver is GPS tracked so you can see where you Uber car is and what route it takes.  A nice security measure too.

So, the business model is quite compelling.

But what’s really interesting is how Yellow Cabs will react.  Will they push communications out for their brand in an attempt to counter Uber’s market share gains or will they rethink their model?  That is, brand versus community.

kodak-duck

History is littered with case studies of organisations that couldn’t or wouldn’t adapt to a shifting market or technology.  Look at Kodak.  This organisation actually invented the technology that became its demise – the digital camera.  Kodak just couldn’t shift from its film based business model.

Will this game changer change the public transport category forever?

Also, are you an Uber user?  If so, why have you switched? I’m keen to hear your views.

Paul Cornwell is a Managing Director at BCM

- Kev on October 4

Great brands recognise...."it's not what you (the organisation) say you are, it's what they (the user) say you are, that defines you". With real-time 24/7 feedback from the community I get two clear messages from this post: 1. Don't consider past success an indicator or guarantee of future success 2. Don't suck

- Jo on October 1

I am a complete convert to Uber! What an amazing service - so simple and easy. There's no waiting for the cabbie to boot up their broken eftpos machine and the receipt is emailed to me. Having another human actually be pleasant to me on the drive home is nice too. Good to see some competition and innovation in the industry.

- Jo Stone on October 1

Great post Paul. I agree with you, and I think that Uber is definitely a game changer. It has been fascinating to see the democratisation of so many business models in the past few years, and the inevitable 'head in the sand' response that comes from big business. It will be very interesting to see what happens next.

- Michele Prescott on October 1

Such a clever idea. I haven't used it yet, but plan to - primarily for cost reasons. I note the first line of defence for the traditional cab companies is the Qld Government's 'cease and desist' on Uber - providing a taxi service without an appropriate licence attracts a $1366 fine, with a maximum court penalty of $18,216. Apparently 3 Uber drivers have already been issued with infringement notices.

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