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Uber's decision to disable dynamic pricing during Mumbai auto strike pays off

20-June-2015
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Uber's decision to disable dynamic pricing during Mumbai auto strike pays off

The week started off on a harrowing note for most Mumbai commuters, as autos and black-and-yellow taxis went off the road to protest against app based cab-hire service providers like Ola, Uber and Meru. Twitterati showed their outrage against the strike and helped each other by spreading information on car-pooling.

In said moment of crisis, people also had to resort to these cab aggregators, some of whom had hiked their fares because of ‘dynamic pricing’ (the goal of dynamic pricing is to allow a company that sells goods or services over the Internet to adjust prices based on the market demands). There were reports that on Monday, the day of the taxi strike which was called by Swabhiman Sanghatana union, led by Nitesh Rane, Uber had hiked its minimum fare five times to a whopping Rs 750. Usually it is Rs 150 as a base fare for the first 5 kms. Also, the per kilometre charge shot to Rs 65 against the regular Rs 13-17. In no time, angry users took to Twitter to express their shock and anger.

On Wednesday, Mumbai was hit by another strike, this time by Shashank Rao-led Auto rickshaw Association, which is the largest union of auto rickshaw owners and drivers. This time, Uber announced that surge pricing would not be in effect during the strike. In one of their tweets, the company stated, ‘‘Getting around Mumbai will be tough, but we at Uber are committed to a reliable ride. On Wednesday, June 17, from 00.00 hours until midnight, dynamic pricing will be disabled to ensure that you can get to where you need to be.” It also offered Rs 250 promotional code for first-time commuters to entice them to avail their services.
This move earned them positive points with people taking to Twitter to compliment the efforts Uber made to help stranded commuters.

Here is an excerpt of the posts:
 

Uber has been at the centre of negative social media attention since last year. After facing accusations over a driver allegedly raping a female passenger, the company found itself in the middle of another crisis recently, after a woman made allegations that an Uber driver tried to kiss her forcibly. The victim made a complaint and got a standard reply from Uber’s team, which irked her brother who then posted on Uber’s page that he was looking for proper action to be taken and was not content with just an automated revert. Uber replied to the post informing complainant that their team tried to reach out to the driver via phone within minutes of receiving the feedback. They went on to stress that they have a zero tolerance policy towards inappropriate behaviour and the case would be investigated. Within hours, it created a stir on social media, and earned more media attention and negative publicity for the brand.



While good marketing and innovative campaigns can boost brand image, inability to handle moments of crisis and activate correct damage control moves can have a longer lasting effect on consumer mind-set than any positive promotions.

Social Media guidelines to tackle online crisis:

According to Zafar Rais, CEO of MindShift Interactive, in the service sector, you will constantly face queries and irate customers, but the trick is to understand the situation and provide a thought-through response within the shortest possible time frame. Keeping the tonality personal, responses informative and showcasing your eagerness to resolve the problem at hand go a long way towards ensuring a customer remains with the brand.

Anshul Sushil, Co-founder at Boring Brands, pointed out that “Consumers will complain. And out of 100 things, if you make one mistake, that particular negative news will be the only to gather social media attention. Therefore, brands should be smart enough to take responsibility and apologise fast. The problem here is that, in most cases the accounts are handled by interns, who are not trained to react in times of crisis.”

Santosh Patil, Account Executive, The Small Big Idea, highlighted that the standard reply time should in fact be less than 15 minutes. Some brands do seek 24 hours Online Reputation Management. Brands in the service sector should ideally avail a similar service. Also, no one wants to hear any negative comments about themselves, so sometimes brands foolishly delete complaint messages. In this case, people realise that their messages have been deleted and feel like the brand is not interested in their problems. This can backfire on the brand and cause it to lose customers.

Echoing similar thoughts, Premkumar Iyer, Global Online Marketing Head, Gozoop, cited, “One need to understand that all a consumer wants is to be heard and his problem resolved. When brands practice this, especially through their social media pages, loyalty will increase. Consumers know things will not always be perfect, but they expect brands to be there for them when things go wrong. If you hang them out to dry they are bound to lose faith. The perfect strategy is to be honest, communicate well and have a clear intent to resolve concerns. Obviously, this has to be backed by constant betterment in operations and processes. If a brand manages this then they've got it right.”
 

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