By Steve Sng, Alumnus, SMU School of Information Systems
The travel industry is a huge and lucrative, multi-trillion-dollar industry, but it is also a highly competitive one. Many traditional travel agencies have not been able to survive and have since closed down. At the same time, new online travel startups are popping up all the time.
My company, OWNRIDES, is one of these online travel startups.
I had never taken any subjects related to travel/tourism while studying SMU; however, interestingly, my education in Information Systems was what helped me enter the competitive travel industry. It all began with the interest of wanting to solve an information asymmetry problem in the industry through technology. That’s what kickstarted OWNRIDES, which I had established in Taiwan and has since grown from zero to close to S$1 million worth of bookings a year. It hasn’t been an easy ride—we did a few things wrong, but, fortunately, got a few important things right, as well.
The OWNRIDES platform
The very first thing we did right was in picking a niche but fast-growing segment within the travel industry. In this multi-trillion dollar industry, flight and accommodation segments make up the largest portion with a market share of 73 per cent. As for the travel activities segment—which we had identified and entered into with OWNRIDES—it accounts for less than 2 per cent. And yet, it is growing the fastest, with an expected growth from US$135 billion in 2016 to US$183 billion by 2020.
Because it is a comparatively niche segment, we found that competitors were few with no strong competitors in sight—one less worry for us. This has allowed us to devote our focus on the problems faced by our customers and to work out solutions for them. Getting the product and service right in a market that is on the rise—particularly in Southeast Asia—has allowed us to grow right along with it.
The second thing is picking the right marketplace model. Marketplace is incredibly difficult but when they are successful, they are huge (think eBay, Airbnb, Uber and Grab). For us, we did what we called the “Ubernisation” of tours, which is to simplify the typically complicated and time-consuming planning and pricing part of travel booking. Instead of helping customers plan their trips like what traditional travel agencies do, we’ve created a tool that enables customers to easily plan their own itineraries, get price quotes instantly, and then make their bookings. We also use the same tool ourselves to help our customers plan more complicated trips. With this model, we’ve been able to make the complicated service marketplace much simpler, removing the need for back-and-forth conversations and price negotiations, thus allowing for less friction and a higher transaction success rate.
The third thing is communicating trust. As all transactions are carried out online, including the exchange of money, customers must be able to trust the business enough to willingly make an online payment. When OWNRIDES was first launched, we didn’t have any customers or reviews as yet, so we took to interviewing our own drivers and writing about them on our blog. We were, subsequently, quite persistent in getting our new customers to write reviews for us. We would send them an email to request a review one day after their trip, followed by three days after and one week after. These reviews were then showcased on a variety of platforms online—on our homepage, reviews page, tours page, Facebook page, Google, online forums, and even their own blogs. We also made sure to be very open and transparent with all our reviews, publishing even the bad ones. For the negative reviews, we would always give them a response and explanation.
The fourth thing is that we genuinely care about our customers. We know that when our customers travel, they are in an unfamiliar place that they may not be the most comfortable with. This is why we provide them with the local drivers who can help put them at ease in the new environment. It is very important to care for each of our customers and drivers and focus our efforts in helping them solve as many of their problems as possible.
Success now may not guarantee success in the future. But I believe OWNRIDES is travelling in the right direction.
STEVE SNG is the Co-Founder and CEO of OWNRIDES. He previously founded LoveByte Pte Ltd in 2011, which was subsequently acquired by migme Limited in 2014. Steve graduated from the Singapore Management University in 2011 with a Bachelor of Science (Information Systems).
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