I’m only speculating but, having worked with a number of American technology companies (like Uber) and Indian technology companies (like Ola), the difference in OTP policy between Ola and Uber is yet another testimony of the fundamental difference in the way Indian and American software products approach the same problem.
The typical Indian software way is to ignore the problem for as long as possible. When it’s no longer possible to ignore the problem, the stock response is to find somebody else to blame it on. If that doesn’t work, then take it personally and finally double down with a solution that tries to eliminate the problem altogether. In the process, the solution inevitably throws the baby out with the bathwater and undermines the basic purpose of the business process that was meant to be supported by it.
The typical American software way is to be sensitive to the problem right from the beginning, not take it personally, and take progressive action in small steps in such way that the problem is minimized – but rarely eliminated – without undermining the basic purpose of the business process supported by the software.
Let’s see how this generic framework applies to the specific question related to OTP policy of Ola and Uber.
In my years of using rideshare, there have been instances when the Driver started the the trip before collecting me from my Pickup Location. Obviously the Driver did that to boost the distance and duration of the trip and gain whatever extra monetary benefit therefrom. This has happened to me with both Uber and Ola.
I have complained to both companies whenever this has happened.
Uber has refunded the excess fare and moved on. I’m guessing it has kept a tally of how many times this happens with a given Driver and modulated their fees / incentives / fines accordingly. But there’s no guarantee that the problem won’t recur.
Ola has instituted OTP to ensure Driver can’t start the trip unless he gets the OTP from me, which will obviously happen only when he collects me from my Pickup Location. This guarantees that the problem won’t recur.
On the face of it, it’d appear that Uber has taken a casual approach towards the problem whereas Ola has come up with a foolproof and comprehensive solution to the problem.
But, on deeper analysis, I’d tend to believe that Uber has acted in proportion to the problem whereas Ola has overreacted. By instituting OTP for all rides, Ola has created a friction hotspot for all Rides when the problem is restricted to very few rides e.g. 2–3 rides in my +5 years of using Ola.
Whether Riders realize or not, the friction hotspot caused by OTP in Ola works on the subsconscious and creates a perception with many Riders – including me – that Uber’s app is “better”. As a result, my go-to choice when I need a taxi is Uber. Ola’s OTP solution – and repercussions thereof – may have eliminated the problem but has risked loss of sales. Accordingly, IMO, Ola’s OTP policy is a cure that’s worse than the disease.
Rideshare is not the only one.
Two Factor Authentication for Digital Payments is another area where this difference between the American and Indian software philosophy is very evident.
When credit cards were first used for online shopping in the mid 1990s, all you needed to make an online payment was Card # and Expiry Date (Yes, even CVV was not mandatory).
This made online credit card payments very frictionless.
But it also introduced the risk of fraud because anyone could use your credit card by just knowing the Card # and Expiry Date. While that was a clear and present danger, in actual practice, fraud rate was less than 1%.
India responded with the classical “throw the baby out with the bathwater” solution: RBI mandated 2FA for all online credit card payments. In addition to Card # and Expiry Date, you need to enter a string of other details like Name of Cardholder, CVV and wait for Mobile OTP, which may or may not come. 2FA introduced a lot of friction and created the risk of failed payments. To solve a <1% problem – which it did – India adopted a solution that endangered 100% of the transactions. Instead of helping driving sales, Two Factor Authentication became a Conversion Killer and Blood Pressure Booster. Many people including me who were using credit card for online shopping earlier switched to Cash or Card on Delivery (COD), with the result that use of cash did not decrease.
(PayTM and other alternative payments emerged with innovative ways of subventing 2FA, thus increasing adoption of digital payments.
Looking at their exploding popularity, banks and regulators realized that, while it was noble, their traditional thinking “security first, convenience next” failed to resonate with the consumer behavior that people want security but only until they get it. They figured out why IMPS, the 24*7*365 Account-to-Account Real Time Payment system launched by bank consortium NPCI, met with lukewarm reception from the public. Learning their lesson, they went back to the drawing board and launched UPI.
UPI is a frictionless overlay on top of IMPS. It has virtually eliminated the friction inherent with direct IMPS and NEFT payments. As a result, it has enjoyed tremendous adoption and taken digital payments usage to new heights in India.)
USA responded differently from Day One. It didn’t introduce 2FA (still hasn’t). Instead, credit card systems were enhanced to develop the capability of detecting and preventing fraud. While this did not eliminate fraud, it kept fraud to within acceptable limits. The Customer Experience was protected. There was no loss in sales.
By eschewing OTP, Uber has protected, if not increased, sales. It has successfully made the transition to the new Experience Economy.
Now it’s not just American versus Indian software. The philosophy of software from almost all countries other than USA resembles that of Indian software. More at Don’t Throw The Baby Out With The Bathwater.
I’m guessing this is one reason why almost all of the world’s leading software companies are from USA.