A few weeks ago, I logged in to the Urban Company’s app to book a carpenter to visit my home and repair a couple of cabinet doors and a window.
From my earlier experience, I was searching for the option where I can pay something like a hundred rupees (maybe less with a discount) to see if the carpenter can come in, assess what needs to be repaired and then gives a quote for the actual repairs. However, that option seemed to have been removed. I didn’t pay much heed to it at that point. I booked 2 services (which I knew where basically going to be a small loss for me in terms of actual repair points) and waited for the carpenter to show up.
The next day, Mr. K, the carpenter had called me but I had missed his call due to some other work. He showed up a bit later than appointed time. I met him outside the building, apologized for having missed his call. While walking back to my apartment, he was asking about what the job was about and what all repairs I needed to get done. This was a young guy, no more than 30 years of age, walking and talking with an air of someone who was forced to take this job. I shared details, didn’t comment much on the attitude part.
He came inside, looked at all the things that needed to be done, explained about things that need to be done and gave me a quote for materials to be purchased. It seemed reasonable enough. I asked him to go ahead, approved his quote on the app and just like that his attitude changed. More respectful, toned down. I struck me as odd. But, again, I kept quiet then since there were other works going on in my apartment.
He returned with the materials, started to work after some quick explanations on how he intended to do the repairs. An hour later, he was done. I had actually paid extra for one hinge repair, but nothing to be done now.
The work was of decent quality. I thanked him for the job and after paying him, I asked him why there was no option for the carpenter to just visit the place and then allowing the customer to book the actual services needed.
Without missing a beat he responded, “because people used that service option to get free advice on everything else in their house and not pay for actual work”.
Though I had not thought about that as a possible reason why that option was removed in the app, I was able to relate with it, although I am still not convinced about the scale at which it could have happened.
People using the lowest priced assessment service option to get information from carpenters who come to visit them but not actually agreeing to let them quote and finish the repair seems counterintuitive. But I could think of several scenarios where customers might have simply gotten the carpenter to give them the actual list of items for the repair or design ideas, paid him the hundred rupees and sent him on his way so that they can do whatever they want themselves or with the help of an immediate local handyman for a lower cost.
So, it is not only metrics that measure someone’s performance that can drive behaviors but pricing models can too. Again, this is not some ground breaking observation. Pretty much anyone who is in a business or working in a company and responsible for pricing their products or services knows it. But they don’t know the full extent of impact, like how it turned out in Urban Company’s case. The assess option was given with trust that customers will appreciate the service and stick to them for the next level of activities.
However, in this case, it seems to have driven a different type of behavior, one that abused the system enough that neither the app company nor the carpenter made money on their time. And finally they had to remove that service as an option. Of course, there could have been more reasons for this change. It was not economical, it was driving up the service provider dissatisfaction.
More than saying anything about the company’s pricing experts’ (in)ability to foresee certain trends (or it was a calculated risk to drive up bookings (classic case of revenue winning against margins), to me this actually speaks more about the nature of humans and the inherent exploitative nature of the society that we are part of.