Complaints in a Third Party Marketplace
As the platform economy continues to grow, so do the number of complaints
If you’ve ever ordered food delivery from an app such as Skip the Dishes, requested a ride from Uber or stayed in an AirBnB, you are part of the “platform economy”, and you should know that complaints in this sector have increased dramatically of late. These platforms have become so prevalent, so rapidly, by disrupting existing services, increasing convenience or reducing cost to consumers.
The rapid growth in this sector isn’t without issue. Resolver recently recorded a 72% increase in complaints concerning 3rd party platforms (Q1 2018 compared with Q1 2019). Our research indicates this far exceeds the growth in this business sector.
So, what is driving these complaints and who owns them? And ultimately, what is the best way to direct a complaint? We take a look at three key areas of the platform economy to answer these questions.
On Demand Food Delivery
|Complaint issue||% of complaints|
Interestingly, food quality is not the top complaint in terms of food delivery platforms. Issues around payments and refunds are reported twice as often, with delivery complaints rating a close second. Given the very nature of these platforms, we can infer that all customer service and staff conduct complaints must be referencing the staff employed at the platform company, since customers will have no dealings directly with the restaurateur in these transactions. But can this still somehow reflect negatively on the business of the restaurant? Yes, it can.
More on this in a moment.
|Complaint issue||% of complaints|
|Fares and pricing||37.7%|
We don’t think of ride sharing apps such as Uber and Lyft as the same as food delivery apps, but in fact they function as the middle man between you the rider and the drivers on their platform who are essentially independent contractors. Our data indicates that fares and pricing was the top issue with nearly 38% of the complaints, and that should come as no surprise. When a rider orders a ride with these platforms, the app provides an estimate for the ride based on your destination, but that cost can change based on traffic conditions. This creates cost uncertainty for riders, and they can be unpleasantly surprised by the actual cost at the end of their journey.
|Complaint issue||% of complaints|
Like ride share platforms, companies like AirBnB, VRBO and HomeAway connect customers wanting to rent accommodations with people who have places to rent. These transactions are straightforward and basically boil down to the booking process, the quality of the accommodation and how the platform handles complaints, as our data above indicates.
“Booking” holds the top complaint spot at nearly 42% of all property rental complaints. A common complaint among customers here is that when booking, they look for properties based on a specific date range and are shown a series of candidate locations. When they choose a property, they may find that in fact it is NOT available for their specific dates, making the search a very frustrating one. Other booking complaints tend to be centred around other filters they have used such as the number of bedrooms or amenities such as elevators, pools, air conditioning, etc. Customers include these filters in their search only to be shown properties that don’t have these options. This can protract the search for a suitable property, which again, is very frustrating.
The Power of Complaints
A complaint with a business, effectively communicated and directed can be a powerful thing for both the consumer and the business. A responsive enterprise will adjust their operations based on mounting complaints. Consumers then benefit from the continual improvement cycle businesses adopt in response to feedback.
However, with few exceptions, these platforms provide an in-app complaint and issue resolution process which force a consumer to express themselves with a star-rating and a strict character limit. (Accommodation sharing apps do tend to ask you to address property issues directly with the host first, if in fact they’ve made themselves available.) These are not effective complaints. Sure, we may achieve a refund or a credit for future use, but the consumer is left with the feeling of shouting in the dark.
Dissatisfied with the complaint option, consumers often turn to social media to better express their dissatisfaction, but without the information regarding the underlying fault they could be doing some small businesses very real harm.
Let’s look at a hypothetical “Pepe’s Pizza”. Prior to joining a food delivery platform, Pepe’s didn’t offer delivery at all. The delivery platform allowed them to expand their reach and compete with big chains whose business models incorporated delivery. However, Pepe’s now has an entire aspect of their business that is out of their control and one that removes them from direct customer contact.
While the platform may provide additional revenue, Pepe’s is essentially blind to the customer impression of his business and how the platform could be affecting this. Is cold pizza Pepe’s fault or that of the delivery platform? If the order was incorrect, was it transmitted incorrectly or did Pepe’s get it wrong? From a consumer perspective, we rarely think along these lines because in the past it was all very straightforward. Frankly, we as consumers don’t have the information to make a fault judgement any more. We use the in-app complaint form, get a replacement pizza or perhaps a refund (which may be offered as credit to use within the platform) give Pepe’s a one-star rating and carry on. Our rating will be aggregated with other reviews for an average score which may or may not form an accurate picture of the quality of Pepe’s Pizza.
So, what’s the answer? First, it’s clear from the increased volume of complaints, the situation is not improving across this sector. When things do go awry, customers are dissatisfied with the customer service and complaint process, and businesses are not getting the kind of quality feedback they depend on to respond to their customers. The 3rd party platform has effectively interrupted the feedback loop. If a restaurant is a source of a lot of complaints, they simply drop them from the platform. They have no interest in assisting that business in a continual improvement process; that’s not their business model.
As consumers we can’t be indiscriminate about how and where we complain. Social media ranting can be so detrimental and we’re ill-informed when it comes to fault. So, our only option is to use the prescribed complaint process of the platform. However, we can make our dissatisfaction with this process known and hopefully produce change.
If these platforms can’t or won’t create a productive feedback loop with their partners, neither can thrive in the long run. When a business can’t hear the voice of the customer, they can’t respond and will suffer losses. If these platforms can’t create a proper communication channel between the producers and the consumers, they will lose users and partners and will wither. How to create that communication without fault management processes in place, isn’t clear. What is clear is that consumers hold all the cards in this sector and will eventually make their voices heard.