Bad customer experience killed the taxicab: here’s how you can avoid that fate

Aanchal Narad

6 min read Last Updated Jun 5, 2020

bad customer experience

Bad customer experience can make or break a business- quite literally. Since the introduction of rideshare companies like Uber, dozens of taxicab companies have gone out of business all around the world. Let’s talk about how bad customer experience changed the business of ridesharing and what it can do to your business.

Fast. Friendly. Frictionless.

Today’s customers accept nothing less. That is why this year, 89% of companies expect to compete primarily on the basis of customer experience.

This January, Yellow Cab Co-Op, the largest traditional taxicab company, filed for bankruptcy. Meanwhile, ridesharing apps like Uber and Lyft have become household names, and continue to grow exponentially.

Why?

With the shift to mobile, customer experience has evolved from individual opinions to collective intelligence, and customers have taken the wheel. The death of the taxicab is solid yellow proof.

When the first taxi roared to life in 1897, transportation meant simply getting from Point A to Point B. Drivers drove, passengers sat and paid the fare, no one else was involved. Customer experience improvement did not determine success, it only earned drivers a nice cash tip.

The birth of smartphones marked the beginning of the end for the taxicab. Suddenly all customers were connected and sharing experiences instantaneously, raising expectations for both efficiency and trust. Unpredictably unpleasant rides in cabs were even more frustrating with these heightened standards, but there was no alternative.

Experience drives reviews and ratings

That is, until 2009, when Uber rolled up to the curb, redefining convenience by putting customers at the center of their business. Customers are asked to rate their drivers immediately after their ride, and drivers are rigorously evaluated based on customer feedback: those with a 4.6 average rating or lower after 100 rides are “deactivated”–a euphemism for “fired”.  As the company explained, “deactivating the accounts of the drivers who provide consistently bad customer experiences ensures that Uber continues to be known for quality.”

A few years later, customer experience grew a bright pink mustache. Lyft, another ridesharing service, encourages its drivers to act like friends: greeting passengers with a fistbump used to be a requirement for drivers. Their standards are even higher than Uber’s: an average rating below 4.8 means the driver must improve or risk deactivation. Drivers are evaluated based on four success metrics, or “Flags”:

  • Navigation
  • Safety
  • Cleanliness
  • Friendliness

Each week, drivers receive an email with all the feedback and flags from their passengers. In the spirit of friendship, if any pair of driver and passenger rates one another 3 stars or lower, they will not be paired again.

The future is fueled by customer satisfaction

To make the travel experience more comfortable, both companies aim to establish trust between drivers and riders. They provide profiles of the approaching driver and a description of their car so riders aren’t traveling with complete strangers. Drivers are encouraged to be themselves, make conversation and even stock their cars with accommodations for their riders in order to keep ratings high.

When was the last time a taxi driver offered you water, snacks, or a phone charger?

Traditional transportation is only one of the many victims of today’s customer-centric consumer culture.

And it makes sense. As they say, it is not the destination, but the journey.

How does a bad customer experience affect revenue? 

Let’s shift our focus from taxicabs and Ubers. It doesn’t matter what type of industry your business is in, bad customer experience can hurt you. Here are a few stats that tell the story. 

  • 87% of customers won’t consider businesses with bad ratings. 
  • 73% of companies with above-average customer experience perform better financially than their competitors.
  • After one negative experience, 51% of customers will never do business with that company again.

Consequences of bad customer experience 

Not paying attention to the quality of your customer experience can lead to the following issues. 

Damaged reputation 

Customers who are unhappy with their experience will often turn to platforms like Google and Yelp and leave 1-star reviews for your business. For obvious reasons, this can hurt your business’s credibility. 

Lose prospects to competitors 

Bad customer experience means less customers. When prospective customers see negative reviews and hear negative word-of-mouth about your business, they’re going to look elsewhere. 

Hurt the employee experience 

Customer experience and employee experience are inextricably linked. Nobody wants to work for a company that doesn’t have a good reputation. The more dissatisfied your customers, the more unhappy your employees. 

The start of a negative cycle 

The worst part about bad customer experience is that it creates a serious downward spiral. Because of the negative effects that you’ll see on employee experience, you’ll start to see talented team members leaving. That, in turn, leads to even worse customer experience. Once this starts, it can be difficult to stop. 

4 ways to protect your business from bad experience

Here are 4 ways that you can protect your business from the consequences of a negative experience. 

Map your customer journey 

In order to prevent bad experiences, it’s important that you map your overall customer journey. Getting this understanding of how customers move from one touchpoint to the next can help you learn if there are any obstacles stopping prospects from becoming actual customers. 

Make communication easy 

Just like people using Uber, your customers want to have seamless experiences. That doesn’t just apply to getting a ride, it also applies to communication. When a customer contacts you, they want to be able to get a quick response. Make sure that your business is making communication easy for all of your customers by offering options like website chat and text messaging.  

Take customer surveys 

It’s important that you get data about what isn’t working with your current customer experience. The best way to do this is through customer surveys. Send surveys to your customers to gauge overall satisfaction and see how they feel about different areas of your business. 

Collect reviews 

Most of the time, the customers who are most likely to leave reviews are those who feel that they’ve had bad customer experiences. In order to make sure that these customers don’t have a big negative impact on your business, solicit reviews from all your customers. This will allow you to get more balanced feedback and prevent your reputation from being ruined by a few outliers. 

Start improving your customer experience with BirdEye 

BirdEye is the only customer experience platform that allows businesses to collect reviews, connect with customers through website chat and text messaging, and send customizable customer surveys. It’s everything you need to improve your customer experience in one place.

unbeatable CX