While disruptive services and online availability of service providers are increasingly gaining control over the market, collecting user feedback is also becoming essential. While serving more customers simultaneously has become easier, it is obvious that the quality of services offered is the primary aspect of service evaluation. And the reviews play a big role in deciding it.
Service Quality: A Deciding Factor for Success or Failure of a Business
While more and more businesses are adapting to online approaches, the market competition is becoming increasingly fierce and for businesses to succeed in this market, they must be ready to offer more while costing less.
The competition between Uber and Lyft in ride-hailing is known worldwide. Both ride-hailing giants are fiercely competing out in open while riders are the ones benefiting from it the most. The immediate switch to another ride-hailing provider business often happens because of the ride fare difference but the quality of the ride is never to be neglected.
Therefore, when competition in the market is becoming stiff, focusing on offering quality services is one of the best ways to keep your customers loyal and earn profits.
Customer Reviews: An Honest Evaluator at Your Side
When it comes to evaluating the quality of services provided, an honest review of the services is required to understand the areas where improvement is needed. And who else is better than customers when it comes to evaluating business services?
Leading ride-hailing businesses are considering these reviews seriously and acting out to frame their services according to rider demands to increase their profits and so should a startup or a small business do.
Customers always want the services that are worth the money they are spending. And collecting their reviews not only helps in knowing where your services lack but also gives insight into what every customer expects from a business when they select them over others. As the statistics suggest, 90% of customers read online reviews while 88% of them trust them.
Following the customer demands is the ultimate mantra of running a successful business and without a doubt, the gate to earning more profits. And the ride-hailing industry can be used as the biggest example over here.
Ratings and Reviews in Ride-Hailing: An Excellent Example
Urban ride-hailing is storming the entire market. Because of the increasing number of riders choosing online ride-hailing, more and more startups and entrepreneurs are turning towards ride-hailing and it has populated the entire industry ultimately, making the competition tougher than ever. As Statista concludes, the global revenue of the ride-hailing industry has reached 183,677 million U.S. Dollars and it is also estimated to show an annual growth rate of 14.8%.
Among all the competitors, Uber leads the entire market with a 71.1% market share in August 2019. Therefore, while others are still deciding on their next strategies, Uber has planned out many new approaches and already put into use to attract more customers and one of these strategies is the amazing feedback system it implements to ensure excellent services are offered every time.
User Reviews: Give Equal Opportunities to Drivers and Riders
While the disruptive business strategy of Uber leads it to earn profits from ride-hailing without owning a single taxi, the stakeholders of this ride-hailing system are given equal importance.
The rating system of Uber is popularly known as not only riders but also, drivers can rate the riders on the scale of five stars. And the point to note here is, riders can skip the rating process while drivers have to mandatorily rate riders after the trip ends.
While this system is a bit different from the traditional one, drivers often miss the catch here. As drivers are supposed to rate the passenger behavior, they can also report any scams or increased ride rejection rate or no show ups efficiently through the app.
This lets Uber know what went wrong and when to save themselves from potential fraudsters. However, the case of misunderstanding the rating chart is a whole new story.
Boosting Up Ratings: Averaging Makes It Difficult
In spite of delivering excellent services to customers, the drivers are not seeing any significant difference in the ratings and this leads them to suspect if the system they use is secure or not. The responsible factor here is the number of customers rating out drivers and not the system.
The rating stored and shown in the system will be of the average of all the ratings received. The rating system of most of the online businesses works on the concept of averaging and it affects the final output. Understanding the psychology behind this system is essential to achieve higher ratings.
In order to preserve their five-star ratings, drivers must earn the same ratings from all customers that post their ratings which is nearly impossible. Also, providing ratings and reviews to drivers is not made compulsory for riders which automatically ends up lessening the number of ratings received.
Also, the difference in ratings per individual often tends to lower the average ratings received and ultimately, drivers often get upset with the ratings received while having delivered the best of their services. Hence, finding out the solution to this traditional rating system has become necessary and many have found it outside the scope of ride-hailing.
Binary Rating System: Ensure Efficiency in Rating System
The binary rating system is the boon of social media of today. Starting from Instagram to Twitter and Youtube, they all have implemented this system years ago to save their users from other possibilities that lend them poor experience.
The binary rating system aims to deliver only 2 options to users when they rate a service, either yes or no. There are no in-betweens and it surely helps increase efficiency.
Youtube previously had a five-star rating system where users could rate a video on a scale of 5 stars which rapidly got replaced with a thumbs up and thumbs down for collecting user feedback. As the rating system through "stars" is proven to be ineffective in most of the cases and switching the rating system to binary has become one of the highlighted changes as Netflix also switched to it from traditional "5-star" ratings.
The primary benefit it offers is the clarity enhancement in ratings provided. Users can accurately provide the ratings and reviews to help enhance the services provided. The binary rating system is popular among social media because of its easier interpretation and worldwide use of social media handles.
Apparently, 3.484 billion social media users are there presently in 2019 which marks a 9% increase in numbers year-by-year. And this embarks a great way to go for binary rating systems.
Ratings and Reviews for Uber
Uber takes its users seriously. Asking for their reviews and ratings, it intends to deliver the best services in spite of the differences and possible queries raised in operations.
Therefore, making their rating systems more efficient is one of their priorities but has not introduced the same binary system yet. Instead, it focuses on eliminating causes that lead users to not rating the services.
The Reasons Can Be Any of The Following:
Users are forced to post a review after rating the service provider or the entire system.
The timing is wrong, that's all. If a user is in a hurry, he/she will definitely skip the review part.
The business is not much concerned for the reviews as they do not act out for resolving any complaints received earlier and many more.
Generally, users who are providing ratings are asked to post their reviews also on the play store or any other source which annoys most of them and leads to skipping the entire process within a second.
Therefore, eliminating such reasons, Uber has made the ratings and review process much easier by letting riders skip it entirely or they can choose to just provide the reviews. While for drivers, it is necessary to at least rate the riders at the end of the trip.
This feature is catchy as drivers also get to rate riders. This system has inspired many and even for other ride-hailing businesses, who chose to follow the steps of Uber with their own uber clone applications tend to implement the same in their system.
And such rating systems can actually improve performance and productivity while also giving a business benefit of understanding their stakeholders efficiently.
Rating Process for Users
Users are the center of every business activity of online businesses. Keeping all their mentioned criteria and requirements in mind, businesses try to provide services to increase their profits while earning recommendations from users.
Therefore, users play a vital part in making a business successful. The primary concept behind inventing a rating system is to check whether user satisfaction is achieved or not.
A rating system enables users to efficiently voice their suggestions that can lead a business to serve them according to their demands. However, the popularity of the rating system has made everyone a critic around.
While posting their reviews and ratings through the system, users must first evaluate the entire system and the situation to ensure no business is put in harm's way because of a lack of accuracy when rating a system or services.
While startups and small businesses are also considering implementing customer reviews and rating systems in place, business giants like Uber are also keeping on with it just to assure their customers that their voices are heard.
Also, it helps in finding out the mischievous personnel from the business who can turn the tables around for a business which in the future can result in a significant loss for any size of business.
The Future of Rating Systems
Are rating systems here to stay? Yes. Observing the increasing popularity of online businesses and on-demand business model, customers are facilitated to avail any kind of services from any corner of the world without making it difficult to find out one. It connects the service providers to customers in need and earns profits from their share earned and paid.
Therefore, knowing the user response and their feedback on the services provided becomes necessary. And since the rating system is great at providing insights related to customer experience and collects their responses, it surely will always be the one to be implemented in every online business. Also, it is found that 91% of millennial generation of today considers online reviews as much trustworthy as personal recommendations.
While businesses are considering ratings as crucial criteria to evaluate their own service standards, the service providers are also concerned about the ratings as it defines their services to be accurate and helps earn more recommendations from future customers.
Ultimately, following the on-demand business model of Uber and running their marketplace business online, the business owners are highly dependent upon the rating system and the use of it will only be subject to increase.