The power of data – value proposition development in a digital world

How UberEATS strengthens Uber’s ecosystem

This article was published earlier on LinkedIn by Iason Onassis, Senior Director and Managing Consultant at Industry consulting, Philips Engineering Solutions: “Uber is not just providing value propositions to its customers. It leverages its data to also provide value to its suppliers and ecosystem, thereby strengthening its position versus competition.”

In an event I attended recently, Marco Knitel, Managing Director of UberEATS in Europe and the person responsible for the European launch, presented the journey of his company. We all know Uber and many of us are enthusiastic users.

Uber keeps on innovating on its core service, for instance with the introduction of UberPOOL. By knowing ride needs of multiple people it can provide shared rides that only incrementally change the route while it can reduce overall car movements with up to 50%.

By the way, it is not a new idea, for decades in cities like Athens taxi drivers did the same thing during rush hour. While driving, they would make a questioning gesture to people hailing cabs, who then would shout their destination. Based on an ‘algorithm’ in their head they would make the decision to add another passenger or not, sometimes even despite protests of the passenger that was already inside the cab.

Also during rush hour at London Paddington, cabs share rides, making waiting lines shorter. Other transport companies have trialed and are doing this now dynamically on-line with an app-based system. An example of a few years ago, in more scheduled services, was Kutsubussi in Finland.

Uber has now added even more freedom to the system by adding an additional element: the start of the ride does not have to be one single point or near a scheduled route. And as Uber has a large continuous stream of passengers and cars it can do a much better job than scheduled services.

Optimize and innovate services with databased value propositions

While Uber uses the data it has to optimize and innovate its services, it also moves into other areas like home delivery. Starting in San Francisco it now offers this service in 71 cities across the globe. The fact that Uber uses its strengths in assets is a well-known innovation route to take to enter into and create new businesses and markets.

It uses the assets like the fact that it is already on your mobile, that you trust their brand, and that they can easily allow you to make payments through a system you already use. It also leverages its unique capabilities, like organizing point-to-point city transportation. Going into adjacencies based on strengths in assets and capabilities is what many companies do to create further growth outside the core.

Building on their ecosystem with data

What is more interesting, however, is that UberEATS uses the data it gets to further improve and build its ecosystem. UberEATS obviously, like all databased value propositions, trials every part of its app with, e.g., A/B testing to ensure it gets the best possible layout, buttons, colors, information it shows on the first page etc. It also keeps track of your preferences so that the right types of restaurants come up. And it uses your reviews to make better reviewed dishes, and restaurants come up higher in the list. Now that is all straightforward.

But UberEATS also provides value to its ‘suppliers’. It can inform restaurants when their quality is dropping. As it knows where the requests for a particular restaurant or restaurant chain come from, it can analyze whether or not it makes sense to open a new restaurant (or even what it calls a dark kitchen, which is just a kitchen for takeout) and where it should be located. And it can see how far certain food can travel before the rating goes down because of low temperature or sogginess of the food, and provide those data to the restaurant.

Databased value proposition development

In doing this UberEATS follows the same path that others like TomTom did, as I described in the article Which route to take to create value from data. But next to providing the service, UberEATS uses it also to strengthen its ecosystem.

The question is, what is your data play?

How do you develop value propositions based on data of your products and services? And what kind of value propositions are these? Do they address your customers’ needs or can you also do value propositions development that helps your suppliers and even builds and strengthens your ecosystem?

Start with understanding the ecosystem and needs

At Industry consulting, Philips Engineering Solutions, we use a lean start-up accelerated approach that starts with understanding the ecosystem and the needs of the various players. Then we do testable value propositions development that develops reinforcing propositions based on the company or ecosystem data. We have found that it works in our industries but also with clients in other industries.