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How Behavioural Science can help your company: an example from Uber

The field of behavioural science has been growing in the past few years and many companies have been more aware and interested in the advantages of applying its insights, improving the services they provide. Specially, interventions using nudges to tackle real-world problems are a low-price and an easy way for companies to influence and change consumers’ behaviours, which consequently leads to their success.

A very well-known company that has been using knowledge and methods from behavioural science is Uber – an app that allows people to request a car to travel from one place to another. This company has used behavioural science not only to target its customers but also its drivers.


How is Uber nudging its customers?

Most of the time, people choose behaviours that don’t involve friction, that is, they are more likely to engage in automatic behaviours that don’t require much thought and effort to perform successfully. Economists consider that the most effective way to decrease friction is to reduce the time, effort and costs between a provider and a customer during transactions and products acquisition. Uber is designed on this low-friction principle (Wood, 2019).

When opening the app, GPS knows right away the client’s exact location. At the same time, the app allows the client to see where the car is and how long the pick-up will take while waiting. This reduces feelings of uncertainty, increasing perceptions of control and causing less friction while using the app, thereby improving user experience.

Uber also nudges their clients in the moment of giving a tip to the driver. The tip system is based on a cognitive bias known as “Middle Option bias”. After the ride, the app displays three bubbles with different tip values for the customer to choose from. According to this bias, when presented with a set of options, people tend to select the one in the middle because it seems the safest. Besides, giving these options to tip the driver right after the ride makes this behaviour more accessible, thus increasing the likelihood of tipping (Simons, Weinmann, Tietz, & vom Brocke, 2017).


How is Uber nudging its drivers?

Uber drivers are independent business owners which means they can work wherever and whenever they want to, making it harder for the company to have control over their schedules. As Uber wants to be a leader company in the market, it must provide the best service to clients, making sure there are always available cars, at any time and at any location, whenever a client requests it. Thus, the company needs to engage its drivers into working as much as possible to make the company succeed.

Uber keeps drivers on the road through people’s tendency to set earning goals, which is referred to as “Proximity to Goal bias”. Uber developed arbitrary goals for the drivers, so when they try to log off, a message pops up saying that they are “just some dollars or points away from reaching a certain goal”. Besides, when new drivers complete a specific number of rides, for example, 25 rides, they earn a bonus. Sending messages of encouragement like “You’re almost halfway there!” also motivates the drivers to complete the task and to stay on the road (Scheiber, 2017).

Another way to keep drivers engaged is to reduce the time they have to wait between trips. If you have already used Uber, you probably noticed that while you were in the car, the driver was already getting a notification for another trip. This makes the driver constantly busy, reducing the time to decide whether to change the app or to stop working for the day. This default option of having a new ride before the current one ends, it’s more likely to keep drivers on the road. However, drivers have the option to pause the services’ automatic queuing feature anytime they want (Scheiber, 2017).

Uber is also developing a feature in the app that will allow drivers to schedule the location and time of an appointment they need to attend. The app will then start to give the drivers trips to take them closer to that location in time, therefore improving drivers’ experience, while increasing control over their work lives (Scheiber, 2017).


Uber is a solid example of a successful company that is improving its service and product using insights and methodologies from behavioural science. The company has established its own team of behavioural scientists, known as Uber Labs. They focus their approach on quantitative research, always considering the details of a specific product context and working together with other fundamental teams of the company (e.g., product management, marketing, user experience, engineering) to provide the best solutions for its success (Gosnell, 2019).


Every company is made of people that work for other people. This reflects how important it is for corporations to apply theoretical insights of behavioural science to real-world problems and challenges. Taking into consideration how people behave will allow companies to provide better services for customers and, at the same time, more success for themselves.


Author

Mariana Marques



References:

Gosnell, E. (2019). Building Behavioral Science Into Your Organization: An Example. Disponível em: https://blog.usejournal.com/building-behavioral-science-into-your-organization-an-example-e0ebaed73927


Scheiber, N. (2017). How Uber uses psychological tricks to push its drivers’ buttons. The New York Times, 2.


Simons, A., Weinmann, M., Tietz, M., & vom Brocke, J. (2017, January). Which reward should I choose? Preliminary evidence for the middle-option bias in reward-based crowdfunding. In Proceedings of the 50th Hawaii International Conference on System Sciences.


Wood, W. (2019). Good habits, bad habits: The science of making positive changes that stick. Pan Macmillan.

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