The beauty and elegant simplicity of the Uber Business Model deals with a problem that has plagued many business sectors for years. *Anne Nicole addresses this in her terrific piece recently published in LinkedIn. She uses a rather nicer term, The Rise of the Bad Guy Premium.

Here you go.

For those of you who know me the Uber reference is very close to my heart, hence my love of this article and my desire to share.

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Technology’s ability to track two-way feedback could allow companies to avoid or charge more for customers who behave badly.

Earlier this year, I was at Singapore’s Changi Airport at a transfer desk checking in for a connection to Thailand. It was an ugly situation. In front of me was a belligerent Western woman, hurling insults at an airline employee (who was responding with admirable patience). She called the employee stupid and pathetic while a crew of airline employees tried to work together to rectify the situation as quickly as possible.

At the end of the transaction, the woman received free lounge passes. Good Lord! Rather than being punished for her terrible behavior, the customer was rewarded, and there was no recourse for the abuse the airline employee had suffered.

Surely this level of abuse would have an impact on employee happiness, which would impact retention, which would impact the bottom line of the airline.

What if there was a way for the airline to make a record of this exchange? Then the airline would have a choice in the future: charge her a premium the next time she makes a booking or refuse her booking altogether. (“Yes!!”– right first air-pump with elbow bent and gently resting on lower torso.)

This could help the airline either weed-out bad customers or make them compensate for the additional costs that bad customers can cause to a business. It could even allow the airline to lower prices for the rest of us that treat airline employees like they deserve to be treated.

Enter the Bad Guy Premium

An acquaintance of a friend, let’s call him Adam, drank too much one night and took an Uber home. At the end of the ride, he vomited in the car and left the driver to clean up the mess. The next day, Adam tried to hail an Uber and had no luck. He could see the cars available on his app, however no one was taking his fare. He ended up hailing a cab. Weeks later, while traveling internationally, Adam still had trouble hailing Ubers.

When you take an Uber, you get to rate each driver. What I discovered from this story is that the driver also gets to rate you. Adam’s theory? Getting sick in the car caused his rating to plummet, and drivers no longer find his fare worth it.

I call his suffering the “bad guy premium.” This means that the Adams of the world will have to pay more, in either convenience or financially, to experience the level of service that good Uber customers have come to expect.

Just like slowly earning back someone’s trust after letting them down, Adam can rehabilitate his rating, but it will take some time and some good behavior.

Banks have been charging higher interest rates to risky borrowers for hundreds of years. Many businesses choose not to do future work with customers that don’t pay their bills or are difficult to work with. Why shouldn’t more companies leverage today’s technology to start penalizing customers that are bad for business?

Bad customers are on notice: if Uber can make this work for drivers, just think of what airlines, restaurants, call centers, and many other industries could do. Perhaps in the future the good guy will finish first.

Have you encountered a situation that made you wish there was a bad guy premium for your industry? Let me know in the comments section please.

Alastair
MaxCo Advisors
October 7, 2015

*Anne Nicole is currently a Relationship Manager at LinkedIn, where she works with clients to develop a professional brand, engage with insights, find the right people, and build relationships. Follow her on LinkedIn or Twitter at @annenicolesays.