Behavioral science can make people squeamish, perhaps with good reason. No one likes the idea of some big company pulling their psychological strings, nudging them toward decisions they don’t actually want to make. (Editor’s note: See also, Cambridge Analytica, circa 2016).
Some have dubbed these unwelcome ploys “dark nudges,” and they are most famously linked to — who else? — Uber. Last spring The New York Times ran a lengthy (and beautifully designed) exposé on how Uber taps into behavioral science to keep its drivers on the road longer, at times using psychological tricks to steer them to less lucrative territory.
The article sparked an outcry from readers and scientists alike. Francesca Gino, a behavioral economics professor at Harvard Business School, wrote, “Uber Shows How Not to Apply Behavioral Economics.” Leslie Albrecht cited Uber’s trickery in a MarketWatch article titled, “How behavioral economics is being used against you” — the feature image of which is a terminator with glowing red eyes, grinning demonically.
These overreactions say more about Uber’s shady reputation than its mostly light nudges. That’s a valuable lesson: How a nudge is received may have less to do with the nudge and more to do with the nudger — and the recipient’s relationship to them.
In the wake of the Uber story, Richard Thaler - the Nobel Prize-winning behavioral economist and author of Nudge - chimed in on Twitter:
This seems about right to me. Many things to complain about regarding Uber but not so much the stuff here. What is it that people hate? https://t.co/njk0FGhtkd— Richard H Thaler (@R_Thaler) April 3, 2017
Koen Smets, a behavioral change specialist, wrote, “Let us not get all hysterical about ‘psychological trickery’—the ‘brilliant jerks’ at Uber may deserve criticism for many of its policies and practices, but their use of behavioural science should not be among them.
It is telling that neither Thaler nor Smets could rush to Uber’s defense without also acknowledging some of the company’s other problematic practices, which include:
- Running questionable background checks on its drivers
- Enacting surge pricing during terrorist attacks
- Allegedly fostering a racist and sexist environment
- Being sued by millions of drivers for benefits, overtime pay, and tips
- Using “Greyball” technology to deceive regulators
The list of reputational improprieties goes on and on.
Uber’s brand darkens everything it touches, including its nudges. This is an aspect of behavioral economics that perhaps goes under-considered: What is the brand’s reputation and how does the subject of the nudge feel about the nudger?
We may feel a pang of annoyance (and then guilt) upon receiving a Change.org email asking us to sign another petition fighting for chickens’ rights. But that is nothing compared to the blast of rage we get from a fat catalog from some store at which we’ve never shopped jamming up our mailbox IRL.
In the first instance, we have a positive impression of Change.org, We think their hearts are in the right place, we’ve signed their petitions in the past, and we do want to help chickens. (Editor’s note: Yes, we do.)
In the latter examples, we feel invaded by some company that bought our data and is now laying waste to millions of trees.
More important than just our feelings, consider Richard Thaler’s Three Principles of Nudging:
- All nudging should be transparent and never misleading.
- It should be as easy as possible to opt out of the nudge, preferably with as little as one mouse click.
- There should be good reason to believe that the behavior being encouraged will improve the welfare of those being nudged.
The Change.org email follows those principles. The mailer does not. The prices listed in furniture and clothing catalogs are often misleading; it is decidedly not easy to opt out of getting catalogs in the mail; and helping chickens will make me feel good, while dropping five hundred bucks on a chair will not. (Editor’s note: Really depends on the chair)
“Well then,” you’re thinking, “as long as we obey Thaler’s rules, our nudges will be well received, right?”
Not so fast. Let’s revisit Uber.
As Thaler himself implied, the company’s nudges were transparent, they were easy to opt out of (with the click of a button); and in at least one sense — financially — they aimed to improve the welfare of drivers.
It didn’t matter. Uber’s brand was so riddled with holes by the time the article was published that its nudges were labeled “dark,” “psychological trickery" and “...How Not to Apply Behavioral Economics.” Countless other companies utilize the same tactics, and their nudges are mostly met with shrugs.
Uber employees, customers, critics and observers all had a fairly negative impression of the brand which colored how they — and we — received the nudges. Instead of “Uber Misuses Nudges,” it became “Uber Up to No Good… Again."
Almost all companies incorporate behavioral economics into their practices one way or another (whether they’re conscious of it or not). It would behoove them, then, to consider not only the nature of their nudges — Thaler’s Three Principles — but also their brands’ reputation and how that might turbocharge the impression those nudges leave on the rest of us.