Driving the Change
Matchmaking through Platforms
As we negotiate the last few days of 2021, I am grateful for your love and support. This has been a particularly difficult year and we are in this together. It has been a year of tragedy but also of hope simultaneously when we rose together to face the adversity brought on by the pandemic.
If you are an IBS Hyderabad alumni , I would request you to click on the link below and make your valuable contribution to the alumni fund by the end of this week. More details at the end of the newsletter
https://www.ifheindia.org/alumnifund/
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DTW
During the Week, Ola announced a major change in its UI for its drivers impacting all three stakeholders- Drivers, Riders and Ola.
All of us have experienced during our ride-sharing moments, the dreaded call or sometimes an in-app message - drop point? Cash? Sometimes it is masked as a polite inquiry and sometimes as a nudge to do the needful but at all times as a major inconvenience and sense of helplessness and uncertainty. The primary reason for this short and often frustrating experience is the platform’s endeavour to prevent cherry-picking of rides by drivers and to ensure that the riders are offered a ride in shortest possible time. Alas, it has failed miserably over last few years as drivers felt being ousted from the entire decision making by an obscure algorithm which just maximised the ride hours without any additional revenue for the drivers. Platforms are simultaneously skeptical of cash transactions as they fear that the driver partners may not be prompt in sharing the 30% commission with the platforms.
The ride sharing platforms have three stakeholders and thus a Trilemma to solve.
Current scenario is Platform-Rider value maximising where the driver feels left out. It is also morally reprehensible as the drivers brings the maximum for the transaction and seems to be left out from the decision making. As a result , we have seen frequent cancelation and denial of service by the drivers. They have often been disappointed by the “quality“ of ride i.e. distance, driving conditions and the pay off. They have tried multi-tenant approach by registering on multiple ride sharing platforms to improve their odds.
Proposed scenario is Platform-Driver value maximising where the rider might be left out in cold (literally in some parts of country). It again looks unfair as the riders are the ones who pay for the transaction and thus deserve to be treated with respect. If the proposed changes are implemented fully, we might end up in situations where the riders traveling to ‘inconvenient/uncomfortable‘ destinations would never get a ride and thus defeating the very purpose of democratisation of ride hailing service. This could lead to riders ditching the ride sharing platforms and going back either to pubic transport or private vehicles or even better just do a zoom call/Zomato it/ stream the content.
The third scenario which played out before the platforms made this UI change was a simple case of disintermediation. After the rider-driver match making was completed by the ride-hailing platform, both driver and rider would leave the platform and complete the transaction offline. This was value enhancing for both of them- drivers saved on the commission to the platforms (often close to 30%) and riders were saved from the harassment of cancellation and wait time even when they paid the same price. Of course, it lead to obvious problems of safety and security but surely was very rampant practice with no efforts by the platforms to stop it.
To conclude, these developments point to a future where the co-creation of value through platforms has to be considerate to both sides of the network. Perhaps platforms need to incentivise drivers to take rides by lowering their take rates as any platform business which evokes this level of frustration from both sides can hardly be sustainable.
OTW
Over the Weekend, Aru and her friends launched their year -end podcast Tynkrring with XYZ where they discuss friendship, the future and more fun things!
Two key takeaways from the podcast- How the past year has been for the young people including the three of them and how they realised that we should not base our life on unbased hope. AND how we don’t believe in putting ultimatums on ourselves even as we become adults and go to college soon. So, here is my message for them as they embark on an important phase of their life- it is going to hurt at times but take the hurt and unmask it to reveal growth.
There’s a scene in all-time-great Lawrence of Arabia where Potter copies Lawrence’s trick of snuffing out a match stick with fingers and burns his fingers thus prompting an iconic response from Lawrence- "The trick, William Potter is not minding that it hurts."
As we sign up for another year under the shadow of Covid19, let us be little more stoic in our approach and learn to deal with pain. We are little beaten down and dealing with glimmer of hope to be brought down again with another variant is getting on our nerves. But I have a feeling that 2022 would be different than 2021 in many ways including our general preparedness and medical expertise in tackling the situation.
Stay Safe and Hope to See You Soon.
I Love You
Shailendra
PS- One of the ways by which accreditation agencies judge the linkages between a Business School and alumni are the financial contributions they make to the alma mater. In this regard, IBS Hyderabad has created a separate alumni fund which will be used to support the alumni in various ways: Alumni Chair @ IBS, continuing education and skill development, student awards, sponsorship of seminars and conferences, scholarships for students in need, incubation cells to support new ideas, etc. We request your support in strengthening the alumni fund and building a good corpus.
To reiterate, these funds will be used exclusively to support the students and alumni in various ways. We will have an advisory committee with alumni representation to set the priorities. Your contribution will also enjoy tax benefits (50% Tax exemption – Section 80 G).
The link details for the online contribution are provided below.
https://www.ifheindia.org/alumnifund/
If you have any doubts, I will be happy to clarify.
Invigorating!!!