Uberisation in utilities - a promise or a threat?

Uberisation in utilities - a promise or a threat?

Consumers are becoming increasingly accustomed to having more control and visibility on their purchases. Can utilities adapt this into their services?
Published: Fri 02 Mar 2018

Stemming from US startup Uber’s disruptive ridesharing service, the term Uberisation, is defined as “subjecting (an industry) to a business model in which services are offered on demand through direct contact between a customer and a supplier, usually via mobile technology,” according to the Collins English Dictionary.

In a rapidly moving market where services are expected to be frictionless, providing an end-to-end, digitised user experience will be crucial. Consumers, particularly millennials, are paying more attention to their products and constantly seeking ways to control them where possible.

So how will this affect utilities? With the emergence of transactive energy and blockchain technologies handing more control to the consumer, is Uberisation another technology advancement that utilities should harness ahead of the curve?

Uberisation in the energy market

Much like Uber riders who know who is coming to pick them up, where they’re coming from and what car they’re driving in, a large function of the Uberisation of energy for the consumer is the ability to control their own spending and supply - gaining full visibility on market value, demand and sourcing.

In conversation with Eric Morel, Consultant for Energy Transition and Optimisation at French-based energy consultancy Mach&Team and ex-CEO of Schneider  Electric Powerline Communications, we discussed the outlook for utilities in the face of Uberisation.

He says, “For me, Uberisation means two trends. The first is  ‘disintermediation’. More and more, there will be direct business links between consumers and producers or other bodies and less intermediaries.”

“The second one is ‘Fragmentation’. In the past, the energy world was a story between centralised actors and end consumers - maybe in the future, these centralised actors will be put into question and into competition with smaller players. This movement for me is certainly a part of Uberisation.”

Neither of these movements are debilitating for utilities, however. “What my work with utilities shows is that utilities have a choice - either they adopt a very defensive position regarding this Uberisation or they try to take advantage of this move.”

Increased workforce visibility and culpability

A fundamental feature that Uber and many mobile services provide is visibility on customer’s assets. The ability to fully visualise and monitor the progress of their delivery, transport or other services helps them to not only continue with their day, but also to understand what blockages there may be.

From the utilities’ perspective, this increased understanding and trust from the consumer can also act as a driver for internal KPIs, monitoring and performance.

We spoke to mobile workforce management specialists at CGI, where Denis Gelineault, Director of Consulting Services, gave us more insight.

He explained that “giving everyone visibility from the consumer to management, giving them accountability - good or bad, gives everyone more incentive to fix things.”

This goes beyond simply being able to see exactly what field workers are doing. Anything from bookings to swift customer service responses can benefit.

Gelineault says: “When you contact utilities to get a meter installed, how quickly do they respond? How long do they keep you on hold? Are they able to give you an accurate time slot, or are they telling you they’ll be there sometime between Wednesday or 2020?”

Embracing change in utilities

It may not be an easy transition, however, as increased visibility and efficiency necessitates the abandonment of legacy systems.

Gelinault considers that “when everything is tracked, everything is measured, there is real accountability and there may be resistance to that. Holistic, company-wide change systems can bring cultural change to places where there’s people used to doing things manually.”

Morel agrees.“If utilities adopt Uberisation as an unavoidable fact, they can adopt a new image in front of consumers. They can be considered as more open, more friendly, closer to the consumers, closer to the needs of the consumers, instead of appearing far from them when they’re in a pure monopolistic position.”

So why haven’t utilities started preparing already? Morel thinks that, in part, it’s due to regulatory barriers.

“In some countries,” he says, “the regulators are not positioning utilities correctly. They are not providing all the means to implement an offensive and valuable strategy.”

“For instance, the French regulation describes exactly the mission of utilities, should it be a distributor, supplier, etc. It puts these different players in boxes, small boxes, that are described according to the past situation. It doesn’t correlate to the future.”