Car2go Can Make A Dent on Uber - Strategy with RS

Like any disrupter it has identified the pain points of Uber user & is attempting to either reduce or eliminate them. What are the pain points of Uber users?

*Safety – remember the despicable Delhi incident?
*Surge pricing- If the demand for Uber increase then price is likely to increase. For example, if heavy rain lashed Mumbai & the demand for Uber rose then the price will rise to cash in on the sudden increase in demand. This raises ethical & moral questions about the business model pursued by Uber.
*Pricing: Uber has priced itself at the upper end.
* Size of vehicle: Fleet has 'large’ size vehicles which may be difficult to navigate in congested metro roads.
*Energy efficient vehicles? Uber has not focused on putting state of art energy efficient vechile because it is not the owner of these vehicles … it is merely an aggregator.

Car2go addresses these pain points robustly.
1. Safety: In Car2go you are the driver & hence safety issue does not get to raise its ugly head.
2. Pricing does not surge with demand. It stays consistent. Users pay $.41 per minute plus tax. Thereafter there are no other hidden cost like deposits, parking charges, fuel costs, or recurring annual fees.
3. Pricing is extremely competitive.
4. Compact cars: Car2go has chosen to put compact cars on the road cars which are ideal for city driving & hence there are less chances of you getting stuck in the city traffic. Also it is easier to find a parking place for compact cars!
5. Energy efficient cars: These compact cars are also highly energy-efficient which means they’re good for the environment.

Business lessons for us: No matter how big or valuable a company or brand may be but you always have a chance to disrupt or destroy it. For that you should identify the current pain points of users. And then conceptualize a product / business model which ensure that these pain points are either reduced or eliminated. And do not stop there. Go ahead & add a few additional benefits. Human being wish to minimise their pain points & when that opportunity presents itself then they will, on their own volition, shift there franchise to brand / business which promises it & more importantly delivers on its promise.

Remember the Goliath of your industry can be beaten by you Mr. David by pursuing this strategy.

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In this series, Rajesh Srivastava, Business Strategist and Visiting Faculty at IIM Indore gives you a regular dose of strategy case studies to help you think and keep you one step ahead as a professional as compared to your peers. Rajesh is an alumnus of IIM Bangalore and IIT Kanpur and has over 2 decades of experience in the FMCG industry. All previous Strategy with RS posts can be found here