Meaningful Conversation 5: Building a Private Car Service Empire in 13 Minutes

I am running a social experiment to have more meaningful conversations. This is a recap of one of my attempts. If you want to see why I am doing this, please read this: My Experiment to Have More Meaningful Conversations.

This time I chose my cab driver.

I wondered what kind of ideas he would have for my iOS problem, but knew that first I needed to learn about his familiarity with his smartphone. We follow the same process when doing user testing for Clippo. Someone’s background shapes the questions you can ask. For a social media app, you’re going to ask a hardcore Instagram user different questions than someone who doesn’t use Facebook.

I started with a basic first check: what kind of smartphone did he have? Samsung. I knew he could not become an immediate user because our Android version has not launched yet.

Second check: what apps does he normally use? Text messages and maps. The fact that he told me texting was an app probably eliminated power user type questions.

Not expecting much, I told him how difficult it was for us to get users and asked if he had any ideas.

“I have not the first clue, but you seem like you know about the Internet – why don’t you help me.”

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What can Walter White teach us about a private car business?

Now we were getting somewhere. He wanted to get more customers for his private car service in addition to those coming through using apps like Uber. It was his most profitable type of ride and he wanted to use the Internet to grow his customer base. I told him I would try to help, and started asking him questions to learn more about the numbers.

He told me how much he makes from each service, and I asked him what hours of the day and types of trips were the most profitable. The depth of his knowledge about the taxi business in SF was awesome – I learned so much.

After doing a quick analysis of his revenue streams, we decided the most profitable trip for him was to the airport using his private car service. What I told him was that his focus should be on booking as many of those kinds of trips as possible.

Then I told him that because he lives in the Bay Area, the Internet was probably the wrong way to get customers. For example, if he wanted to create an AdWords strategy for San Francisco, he would be competing against the savviest search marketing specialists from Uber, Lyft, etc. That’s tough for anyone, especially an AdWords beginner. What he could do, however, is try non-scalable tactics that would be hard for those companies to replicate.

Given his target customer was an airport traveler, we decided to focus on hotels. But, as opposed to going to large hotels, I told him he should try to form relationships with boutique hotels.

I think that boutique hotels gave him more opportunity for two main reasons: 1) Utilization – large hotels have lines of cabs waiting for passengers, so it was a fairly large opportunity cost to be sitting in the car hoping for an airport trip. 2) Competition – boutique hotels were less likely to be approached by rival cab drivers and would be more amenable to making him a preferred driver for a cut.

This gave us the strategy:

1. Create referral deals with the bellhops at boutique hotels for airport travelers. Why the bellhops? They are the most motivated to create a deal, because they can use the extra money, and are the ones that call the cabs. Also, skipping the hotel establishment allows the deal to close much more quickly.

2. In the down time between calls from bellhops, use Summon and Uber to fill the time and keep his utilization rate high. This would avoid long hotel lines and keep him earning while waiting for the higher payoff trips.

(Side Note: I had to leave Lyft off the list, because he refuses to drive for them. Apparently for a driver to sign up on Lyft, there is only a simple five-minute application. It upset him that inexperienced drivers could thus immediately be put on the road; he felt that he has paid his dues and needs to be treated differently. Though there is nothing he can do about it, I told him that I definitely agreed with him on principle. In fact, I think this lack of driver experience does make the Lyft product suffer a bit. When I took Lyft on Saturday, my driver did not know the city well (she was from San Jose) and we went the wrong way. I did not use Lyft on the way home. Step up your game Lyft!)

And that was that, we were able to create this plan in the 13 minute car ride. I gave him my contact info and I hope that he tries what we discussed.

Would you have added anything else?


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