What makes a good apology? An Uber economist found out

All good apologies come with one
thing.
Pixabay

• A team of economists studied how Uber customers respond to
  different types of apologies after they have bad experiences with
  the company.
• The idea for the study came when one of the researchers, who
  was Uber’s chief economist, had a terrible Uber ride and noticed
  he never received an apology.
• They found that effective apologies need to be coupled with
  some sort of cost, such as a $5 coupon on future rides.

We’ve all said “I’m sorry” at some point in our lives, but that
doesn’t mean we’ve always been forgiven.

As it turns out, we may be doing apologies wrong.

That’s what University of Chicago economist John List found out
after
studying the science of apologies as it related to
disappointed Uber customers. Last year, List was chief economist
at Uber, and in a recent episode of “Freakonomics,”
he recalled talking to then-CEO Travis Kalanick about a bizarre
experience in an Uber car that made him late for his own panel.

“What I told Travis was, ‘You know what is the worst part about
getting a bad trip, is I never received an apology,” List said on
the podcast.

The experience inspired List to examine how different types of
apologies — and how not apologizing at all — would impact Uber’s
bottom line when customers had bad rides with the company.

List teamed up with three researchers including Ben Ho, an
economist at Vassar College who has argued that effective
apologies all share one thing in common: They show that the
person or company apologizing is suffering a cost.

Take what Ho considers a “status apology,” like if someone said,
“I’m sorry. What I did was completely idiotic.” As Ho said in the
podcast: “These are the ones where you basically admit your own
incompetence and you beg for forgiveness by sort of making
yourself look dumb.”

There’s also what Ho calls a “commitment apology” — “a commitment
to do better in the future,” he said — which carries the cost of
being held to a higher standard.

In Uber’s case, the team found that the most effective apologies
were coupled with a literal cost — a discount on future Uber
rides.

As part of its experiment, the team analyzed data from 1.5
million Uber riders who had arrived to their destinations late.
The team divided the customers into various groups, each of which
were emailed a different type of apology from the company, or
received no apology at all. Half of the groups also received a $5
coupon along with the email.

The researchers found that money spoke louder than words: The
groups that received the $5 coupon actually spent more money that
usual on Uber rides over the next few months, while those that
only received an apology went on to spend less than usual on
future rides.

It reinforced the idea that a proper apology should come with
some kind of a cost attached.

“What’s important here is that the firm needs to make sure that
when they apologize, they take proper discretion in that the
consumer understands that there was a true cost to that apology,”
List said.

“When we talk about apologies more generally, if you show some
empathy and some embarrassment to a broad reach of people, it
might not be a true dollar cost, but it’s a true reputational
cost.”

Sociologist Karen Cerulo echoed that thought later in the
podcast.

“The why of what you did is less important to people than your
regret and your remorse,” she said. “And finally there’s really a
successful formula that you need to use: Identify your victim
right up front, then express remorse, and, if it’s possible, make
restitution.”

“That’s it. That’s really what people want to hear in an
apology.”