1 januari 2018
In an otherwise turbulent year, Uber — which operates in 600 cities across 78 countries — managed to give four billion rides in 2017 alone. That’s significant for a company that for its entire existence hit the five billion total rides mark in May of 2017.
But for Barney Harford, the company’s first-ever COO, that’s not good enough. He wants to make Uber more efficient.
“A big focus for me is around achieving operational efficiency and discipline,” Harford told Recode in an interview.
That has to happen rather quickly, however. Harford, the former CEO of Orbitz, has an important year ahead of him as Uber prepares to go public in 2019. A big part of that is cutting the company’s losses. The ride-hail company widened its net losses to $1.46 billion in the third quarter of last year, up from $1.06 billion in the second quarter.
The University of Cambridge alum, who was a long-time associate of CEO Dara Khosrowshahi when the two were working at Expedia, said he was focused on reducing costs by being more methodical with things like marketing and customer support.
Harford is being tasked with figuring out how best to distribute Uber’s marketing dollars between traditional marketing channels and its rider and driver promotions and subsidies.
“I think you should expect to see over the course of the next 12 months that we’ll evolve that mix and the strategy that we use within the way we allocate those investments for sure,” he said.
That doesn’t mean the company will do away with subsidies entirely, he said. While the company has already lowered its incentive payments to drivers quarter over quarter, it remains important for Uber to find a more cost-effective means to attract and keep riders and drivers, given it’s a big source of loss for the company.
There are typically more promotions when the company first enters a city or a market in order to attract new riders and drivers. But in places like China, where Uber was forced to merge with its rival, the company became embroiled in a long-term and expensive subsidy battle.
That said, the company has also historically invested in TV spots and other traditional means of advertising. Still, Harford has the difficult task of figuring out how to spend its marketing dollars intelligently without losing its ridership.
Another key way to reduce costs, he said, is to make customer support more effective.
“What I want to focus on is creating a culture of efficiency, a zero-defect culture,” he said, “because it solves multiple things. One, it reduces costs. Two, it creates a much more enhanced experience for our customers — for our riders, our drivers, for our restaurants.”
Customer support is an expensive and difficult problem to solve at any company, but at Uber’s scale it’s not only enormous, it’s mission critical for the company to get it right.
Uber’s customer support inefficiencies have been at the forefront of many drivers’ issues over the years, and the company isn’t exactly in a position to lose a critical mass of drivers. It’s why customer service was one of the first things Uber tried to solve during its driver improvement campaign.
But with 75 million active monthly riders and three million total active drivers, ensuring customer support is efficient, scalable and not a drain on resources is tricky.
“When you have 15 million trips a day, even a relatively low contact rate creates an immense number of contacts that agents have to handle,” Harford said. “And by the way, nobody really wants to have to chat with an agent or talk to an agent. They’d prefer the problem not happen in the first place.”
In general, Harford expects to focus more on the traditional ride-share business than he will on the company’s UberEverything arm. As COO, Harford oversees the company’s regional businesses led by general managers Rachel Holt, Andrew Macdonald and Pierre-Dimitri Gore-Coty, as well as UberEverything led by Jason Droege.
“At Eats we have a great leader in Jason,” Harford said. “He has full stack responsibility of both business but also product and engineering. My goal there is to make sure we don’t distract that business, it’s in phenomenal hyper growth mode right now.”