Uber: Data Driven Innovation
Uber introduced an experiment in basement bottom pricing this week by charging $5 for carpool rides. There are some limitations to the service: it is currently only in Manhattan, during peak hours, and riders may have to walk a short distance (e.g. a bus stop length) to an en route pickup location.
Some consider this a 'risky' experiment because "Uber could end up eating $20-30 per fare."
Uber is able to try radical experimentation because they have data. They are able to create hypotheses, run models, and arrive at a theoretical ideal price, $5.
Uber knows when and where every rider in Manhattan requested an Uber from, what route they took, how long it took to get there. They can account for all the side costs such as the vehicle was empty before a subsequent job, and the number of riders requests exceeding service.
The only data Uber is missing is the precise market demand and elasticity of riders choosing carpool rides over standard Uber services. The market will tell.
Healthcare: Lack of Data. Lack of Innovation
One reason healthcare lacks innovation in its overall design and delivery is its lack of data.
Without data, we can not run accurate models. Without models, our proposed interventions have unknown consequences. When actions have unknown results, people do not take action. Innovation stagnates.
The introduction of radical improvements to healthcare system design requires high fidelity data.