Will Uber Kill Time-Based Billing?

Why would Uber’s business model impact the standard billing method of established professional firms?

An interesting observation was made on a radio program I was listening to last night.  Apparently a number of taxi operators in larger cities in the US are now doing all their pricing up-front for the passenger before they start the trip.  This means that the old  method of turning on the meter and charging what the end result was is becoming redundant as the taxi operators have worked out that the customer wants pricing certainty.  If the cabdriver doesn’t provide it, the customer will go to Uber…

The disruption Uber has caused within the taxi industry globally has been well documented, however, it did get me thinking.

With increased penetration of up-front pricing for work that used to be based on an set (arbitrary?) rate by time, customers from all segments of the economy are going to start to question the logic of entering a transaction with no known end price.  Where very other industry is going down the path of providing pricing certainty on commencement of a piece of work, why do the professions still believe they are immune from the impacts of the change?

In many respects, the taxi industry is similar to the professions – time by rate and it doesn’t matter to the provider how many hours (or miles) are spent on a job as they will know they are getting paid “for what they do”.  The sad thing is this has been ripe for exploitation (who hasn’t been in a taxi which “took the long way” to get somewhere?)  Unfortunately, it doesn’t create a great experience for the user of the services as they just have to grimace and wear it.

Disruption in pricing and business models is going to increase and roll through many other industries and professions that used to work on the time by rate model.  Customers are experiencing more of it and are going to demand more of it.

Those firms that start on the path to pricing on purpose will see themselves gain a competitive advantage – those that don’t will wonder what the hell happened.

Have a look around the Verasage site – there’s lots of rich material in here (esp recommend a solid listen to Ron and Ed on their “The Soul of Enterprise” podcasts).

The professions are going to become “Ubered”.  I hope they are ready for it.

CalCPA 2015 Honoree Dinner Keynote Address

Note:  –  This past Thursday, I had the pleasure of sharing a brief commentary during the annual CalCPA Silicon Valley/San Jose Chapter’s Honoree and Scholarship Dinner.  In attendance were the Past-Presidents of the Chapter (my year was 2002-2003), Several area university scholarship winners (each was very impressive, probably why the Big 4 have already hired them), along with their professors and family.  Also in attendance were CalCPA Members that have reached their 40 year mark and hence no longer pay dues (lucky them).  Finally, our Chapter awards a Lifetime Achievement Award to one member that has gone above and beyond.  Below is my keynote address (delivered after dinner – so maybe it should have been renamed, an After Dinner Speech;  next time).  I simply thought I would share it here.  I hope you enjoy reading it as much as I did writing and delivering it. –    Dan

Honorary Dinner

Is it an Is or is it Ising?


Good evening past presidents, distinguished 40 year members, professors, scholarship award recipients, the friends, colleagues, and families of our Lifetime Achievement Award recipient, Stu Karlinksy, fellow members of CalCPA, and guests –

It is an honor and privilege to share some thoughts and comments about our profession, its past, its present, and its future.

            My favorite professor and mentor, Dr. Dominic LaRusso, once expressed his view of time: He said, “that for some…..Time Is   and for others – Time Is Ising”…..Is time a noun as is “time is” and hence inactive and merely present or is Time a Verb as in an action for which we, its benefactors, are able to harvest vast wealth? Including financial wealth, psychological wealth, social wealth, and family wealth?

            I believe that Time is a Verb and our ability to harvest is grand. And speaking of time, there are seconds, minutes, days, months, years, decades, scores, and centuries. Each, with its own cadence and its own rhythms. As children, time is fleeting, fast, and sometimes slow. As early adults we recognize that time, at least prospectively, speeds up – and as we crest into our AARP years – we wonder where it has all gone.

            Tonight’s message is for you: young and old, senior and junior, experienced and inexperienced; student and teacher. These are a maturing man’s view of things I wished I had bettered understood when I was younger and for which I believe are worthy of discussion.

  • I wish I had understood how much timesheets suck the life out of professionals and are at odds with the customer.
  • I wish I had understood that we serve Customers and not Clients. That while clients are recipients of what the service provider desires to provide with little control on either inputs or outputs, Customers receive “custom”ized services designed around them with outcomes they desire. Frankly, customers pay more than clients.
  • That when promoting and selling our services that we should focus on outcomes and not inputs. Time-based pricing focuses on the firm and the professional whereas focusing on outputs aligns the customer’s interest with what they want and what they need.
    • Landscaper – (share the lesson here)
  • I have learned that we do not compete with each other. Although we share the same profession, we are colleagues and not competitors. We do however, compete with any and all organizations that can raise the bar of customer expectations – from FedEx providing real time access to each and every package; to Nordstrom playing a piano while shoppers shop, to Google developing a driverless car, to the Ritz Carlton who’s entire mission is to exceed even their customer’s unexpressed wishes – Like taxi cabs of today, we compete in a marketplace driven by outsiders who desire to provide a superior solution to our customer’s challenge and while we labor to protect our monopoly, change is among us and if we forget this, we will be relegated to the role of the Scribe and soon to be forgotten.
  • I have learned that specialists are really valuable and firms that specialize produce superior profits; it is the Deep Generalist that has more fun enjoying each and every day, rain or shine. That ultimately it is our human spirit that drives our success.
  • I have learned that is always better to fire a customer than suffer a painful day providing services to the wretched, to the greedy, to the arrogant, and to the cheap. One doesn’t improve their life until they surround themselves with better people.
  • I have learned that there are 4 ways to spend money – and to never ignore the different quadrants
  • I have learned to price the customer and not product or service – just like an airline – different prices for different people provides optimal results
  • I have come to the conclusion that our future professionals need deeper studies in liberal arts and sciences, and less accounting, auditing, and tax work. The prior comprehensive learning platform provides the foundation for our technical prowess. We should control the profession’s education, like Law and Medicine do, through our own professional schools rather than being a part of a general business curriculum.
  • I have learned that CalCPA, its committees, its governance, its chapters, and its education foundation, together provide an opportunity to change the world of our members by creating an environment for connections and relationships beyond measure. That through this great organization, I have had the pleasure of impacting ten’s of thousands of fellow CPA and CA’s lives and livelihood. That much of that work would never had been achieved or if achieved would have been arrested in its development simply because I had the good fortune of saying yes when asked, being alert when listening, being brave when scared, and being resilient when resisted. I am who I am because, in large part, this organization, this group of independent voices, the amalgam of friends and colleagues, provides an environment like no other for each and everyone of you to grab those proverbial reigns and direct the horse you ride to seek the future you want.
  • I have learned a great deal – and my learning doesn’t stop. To our graduates and students, lifetime learning isn’t a mantra of the old, it is the formula for designing and living your future. Be the drive. Drive your time and make it a verb. Life requires action and you are the only one that can create the future you desire. To our professors and teachers – thank you for crafting our young. Thank you for investing in our future. Thank you for sharing of yourselves to those you touch to have the power to drive their future. To my friends and colleagues, thank you for being there even when you were trying to avoid me. Thank you for your support of my dreams. Thank you for giving of yourself so our profession has a superior foundation to for which to move forward, and thank you most of all of your attention.

May each and every one of you have a remarkable year and until we see each other again, remember to smile, take some time to smell those roses, and may the University of Oregon someday win the Big Game.