April 12th, 2017

Could You Compete with Uber?

Imagine if a competitor with deep (almost unlimited) pockets, speed and disruption, like Uber, was to enter your industry as the main competitor. A company that doesn’t care about status quo, is mostly digital, has no legacy IT systems or infrastructure, and comes out of nowhere to compete with your 20+ year old business. How would you tackle it and would you survive?

This actually happened to one of our customers and the competitor was Uber. They decided to go head to head and survive. Here’s the story of Addison Lee.

Addison Lee was started in 1975 and grew over the years to become London’s biggest taxi fleet with 4,800 cars.

Uber launched in London in June 2012 with their luxury car service and about 50 drivers. The impact on the other taxi companies was fairly limited until UberX was launched in the summer of 2014 and recruitment of drivers and cars rapidly grew to about 3,000.

Addison Lee and the black-cab drivers now saw a real threat. Uber had enough drivers to provide quick response, a reputation for great customer service and most importantly, booking an Uber was as easy as counting to 10. And they didn’t play by the rules of a licensed minicab company or had the need to be profitable.

What Do You Do When a Competitor Disrupts the Market Like This?

Kodak didn’t see it coming and went bankrupt and similar disruption happened to Nokia, Blackberry, Blockbuster and incumbent airlines. The fact is that only 24% of the Fortune 500 companies from 25 years ago are still around today.

Addison Lee did not wait around for the same faith. The team, led by Liam Griffin as CEO, Peter Boucher CCO and Peter Ingram CTO, decided to double down on their mobile experience with support from Carlyle Group (the owners).

After a failed app initiative in 2013, Addison Lee partnered with DMI to reinvent the mobile experience entirely, supported by the following initiatives:

1. Customer Journey

The end-to-end customer journey was mapped out including interviews with passengers, drivers, customer service staff and corporate customers. This became the basis for getting passengers from A to B in the simplest and fastest way. The user experience drove everything else.

In addition to partnering with DMI, Addison Lee also acquired a JumpIn with a young and passionate team of mobile specialists, including Sam Ryan and Barney Williams.

2. Open APIs

A new micro-services-based architecture was created to support new services being developed much faster with the rapid increase in traffic. The work was carried out based on Mulesoft’s Anypoint Platform.

3. Mobile App

It would have taken Addison Lee years to catch up with Uber in functionality and simplicity from the beginning. Therefore, the decision was made to really focus on the core functionality and use cases and keep it simple. Regulatory restrictions meant that Addison Lee had to include an end point for each journey, but besides this, imagination was the only barrier to create a great customer experience. The MVP was delivered in less than 5 months from start to launch.

4. Connected Analytics

One of Uber’s greatest strengths is that it’s an entirely data-driven organization. Executives, staff and drivers all have access to data that help them improve customer service, utilization, revenue and longer term profitability. Most legacy businesses are driven by financial KPIs reported monthly plus some web analytics, but other than this they are working in the blind. Addison Lee had a parallel initiative to make the business a more data-driven organization.

The Beginning of a New Journey

A first version of the new mobile experience was launched in the autumn of 2014 to learn from real user feedback. It wasn’t perfect, but it worked and revenue from mobile grew rapidly to over 50% in 2015.

The taxi war was by no means over, but the Addison Lee executive team and owner were prepared to invest to become a digital business. “Before Carlyle invested in 2013 we were probably spending £2m-3m per year on tech development. Now our run rate’s about £12m.”.

Uber certainly wasn’t slowing down and started attacking Addison Lee in their own core territory of corporate customers. To counter this, Addison Lee moved to a monthly release schedule for the apps to continuously improve based on customer feedback, data and to test new ideas. In 2015, a snooze button was developed and launched as a result of a hackathon.

Sometime in the second half of 2015, the number of Uber drivers in London surpassed the number of black cab drivers, and now stands at around 25,000.

What Happens Next?

Addison Lee is continuing to invest and acquired Flyte Tyme in the US in January 2017 to become a global player in corporate transportation. Although we’re only at the beginning of the journey, we believe that Addison Lee’s commitment to customer centricity, technology and change is a great example of a legacy business that will excel in the digital age.

Magnus Jern
Chief Innovation Officer

P.S. To learn more about the work with did for Addison Lee, check out this case study.

Tags: analytics connected analytics innovation mobile apps mobile apps development Mobile innovation

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