Research Highlights

Proactive Customer Service Helps Ride-Share Startup Gain an Edge in a Brutal Market

Compensating riders in real time for imperfect experiences transforms Via’s customers into brand ambassadors.

Maxime Cohen

When Via proactively tends to customers in real time, they ride more and are more likely to recommend the service to their friends, helping the company gain market share.

New research by NYU Stern Professor Maxime Cohen finds that a proactive data-driven customer service strategy can help companies gain an advantage in the fiercely competitive sharing economy.

In “Frustration-based Promotions: Field Experiments in Ride-Sharing,” Professor Cohen and co-authors Michael-David Fiszer, of Via, and Stern PhD student Baek Jung Kim conducted field experiments to explore whether and what kind of proactive compensation could satisfy customers who experienced unusual delays while using the popular real-time ride-pooling platform Via.

The research found that Via’s approach of proactively reaching out to passengers who experience delays and offering compensation is profitable and can significantly boost customer engagement and loyalty. “When Via proactively tends to customers in real time, they ride more and are more likely to recommend the service to their friends, helping the company gain market share,” said Professor Cohen.

“What sets Via apart is our customer loyalty and our commitment to exceptional customer service. Our forward-thinking approach of proactively anticipating and addressing customers’ needs in real time ensures that Via members always know they can rely on us, and we see the results,” says Gabrielle McCaig of Via.

Compensation in the form of future credit was especially effective for retaining frequent and intermediate-use customers. Riders who received a $5 credit went on to spend between 12 and 37 percent more and took between 13 and 26 percent more rides compared to customers who received no compensation. Another interesting finding – a texted apology, or waiving the charges rather than compensation, were ineffective.

The field experiments were conducted with more than 5,000 customers in New York City and Washington, D.C., in 2017.