You are a PM at Uber. Devise strategies to improve revenue.

Since UBER will have certain timelines, We will focus on low hanging fruits for Revenue increase, That can give decent bump in revenue without exhausting resources

Category expansion (Low confidence since category is already exhausted at high level, More granularity in vehicle selection is not needed )
Geographical expansion (Tier 2 market , Less revenue)
Vertical expansion (Long term business solution, Need to under Industry/Time / Right to win)
Increase Customer Acquisition in current model (Awaeness is not an issue, Marketing is already set in place)
Increase App conversion (Medium effort, High Impact solution)
Increase Ride fulfilment (Medium effort, Medium Impact solution)
Increase customer retention (Medium effort, High Impact solution )

Recommendation : Uber should focus on increasing App conversions. Since this is L1 metrics unlike fulfilment this will give higher dividends in terms of revenue.

Levers for higher conversion can be discussed further if required-

Lower prices
Faster ETA
Better reliability (Tracking, Safety etc)

pravekl · Answer 2 · 2022-03-21T16:46:55+0000

I'll start with the company's objective, define the north star metric to improve and then take a top-down approach address the challenge.

I'm assuming the following:

Objective of the organisation: Become the de-facto option for mobility across geographies
Revenue means top line or gross bookings
Data driven cohorting and price changes/manipulations are already in place or actively being improved upon so the solution will not talk about them
We're considering only the rides business

Revenue: Uber's revenue comes from trip commissions which can be calculated as # total of trips * avg percentage commission * avg trip booking value.

In order to increase the revenue, we can -

Increase the number of trips
Increase commission charged
Increase prices of trips charged to users

Increase number of trips:

We can identify new user cohorts or new use cases for which the existing product can be used and scaled
Expand into new territories
Reduce trip request rejection from both riders and cab drivers
Improve user experience during the journey to ensure that they are retained on the app

Increase commission charged: This change will impact the cab drivers and this will likely result in fewer trips being completed.

Increase price of trips: This change will impact the end user and people may move to competitors or move to personal vehicles/public transport.

Based on the above points, it makes sense for us to focus on increasing the number of trips.

Identifying new use cases where the existing product can be used/scaled:

Users are now becoming more aware of the impact on environment of fossil fuels. With the advent and increased adoption of electric vehicles, maybe these woke users can be targeted and brought onto the platform to use these services. Such users are more likely to use public transport for their day-to-day conveyance needs. Solution - We can create a new category of UberEV and push this through relevant marketing channels and get users to adopt it.
At times, users find themselves in situations where they need a cab urgently and having access to it is more important than the price. In such cases, the users can be given an option to promote their ride request in a way that the driver partners are also incentivised to accept the booking in lieu of others. Situations can be rushing to catch a flight, train or bus, going to the hospital (not an ambulance use case) and other cases where the user is in a hurry. Solution - Create a 'Urgent' CTA on the booking screen after the request is placed so that it can be promoted across driver partners in the area. A surge can be charged to the user and the higher trip cost will result in higher commission for Uber and higher fare collected by the driver.
Cab requests face a higher than normal rejection rate by driver partners. Identify the reasons for the same by reaching out to users and customer support teams. Possible hypotheses for rejections (which can vary across regions):
1. Cab drivers prefer a particular method of payment - Cash or direct payment. Users can be prompted to either change their mode of payment or we can experiment with changing the mode of payment with the highest ride request acceptance rate.
2. Increase incentive for cab drivers by reducing the commission charged for cab rides during times when the rejection rates are high. While this will result in lower commission but it will be better than no commission in case the ride is not attempted/completed.
Determine reasons for driver partner churn - An impact on supply will adversely impact the demand's perception about the brand. If we are able to keep the cab request rejection rate in check by providing ample supply for the demand, we can ensure that the demand is maintained and increases steadily. How to tackle this challenge:
1. Check with supply vertical about issues that driver partners face
2. Do direct user interviews to understand the driver partner's pain points. Common pain points include - limited payouts per day/week; undesired cab rides around end of duty time; unruly passengers. Knowing this better can help us determine what problems to solve through or off-product for the drivers so that they stick to Uber and not the competitor(s).

To prioritise these recommendations, we can list out the effort, potential and confidence in them(already sorted):

Urgent CTA: If this works, Uber is likely to be positioned as the more reliable bet for the users. This will establish good recall and more stickiness among the users.
1. Effort - M
2. Confidence - M
3. Potential - M
UberEV: This solution has an upside on government benefits and young generation being captured as users.
1. Effort - M(operational); L(tech)
2. Confidence - M
3. Potential - M
Preferred method of payment to reduce cab rejection rates:
1. Effort - L
2. Confidence - H
3. Potential - H
Reduced commission when rejection rates are high:
1. Effort - L
2. Confidence - M
3. Potential - L
Driver partner churn
1. Effort - H
2. Confidence - H
3. Potential - M

Recommendation - Pick the easy to roll-out product idea along with a long drawn research idea so that you can execute as well as ideate on some areas at the same time. The key is to execute and learn so that you can actually quantify the confidence in those areas.

Utkarsh Binay Singh · Answer 3 · 2020-11-11T20:57:05+0000

Step 1: Ask clarifying questions to narrow down the scope of the question

1) Revenue or profit? (Revenue)

2) Are we considering a part of the company? (Like uber eats or something) or are we considering Uber the ride hailing and sharing platform or are we considering Uber in totality. (Entire uber)

3)Are we considering a particular geographic location to improve revenue and a particular segment? (India)

4) What is the time period we are focusing on to improve revenue? (1 year)

Improve revenue for Uber in India in the span of 1 year.

Step 2: About the product

Uber is a ride sharing platform that is basically used for moving/going from one place to another. Uber has various different cabs that cater to different target audience. Uber X is used for premium/high class customers, Uber share is a sharing service by Uber that is used for car-pooling purposes. Uber Go is used by customers for economical rides

Apart from their ride services, uber has also ventured out and started uber eats which is basically a food discovery and delivery platform.

Some of the strengths of the product are as follows: Huge brand name, global presence, amazing driver partner network

Some of the weaknesses of the product are as follows: Too much reliance on external driver partners, company is undergoing heavy losses.

Step 3: List down your strategic choices (solutions)

The way by which Uber can improve/increase revenue are as follows:

1) Increase cost/prices

2) Entering new geographic locations

3) Increasing usage of existing users on the app/platform

4)Increase number of users on the platform

5) Entering new businesses or markets

6) Launching/offering new products or services

Now let's explain each of the above mentioned strategic choice in detail

1) Increasing cost wouldn't be the best way to go about increasing revenue as even through increase in price directly relates to revenue growth. It can lead to people backing off and recducing their usage on platform as users always look for the cheapest cost alternative

So this solution is out

2) Entering new geographic locations- Launching into new locations where this product or its competitiors are not being used will give a first mover's advantage.

However entering a new geographic location won't be possible as we only have a year's time to increase revenue thus we can negate this solution as well

3) Increase usage of existing users-We can increase usage of existing users on the platform in the following way

A) By providing regular riders with promo/discount coupon codes for their next rides

B)Providing free food delivery options through uber eats for these regular riders

However as a PM for Uber, I need to keep in mind that money/revenue gained due to increase in usage should be greater than the loss incurred due to discounts and low prices offered on rides

4) Increasing the number of users on our platform

1) By launching new products or services. Launching a hyperlocal/grocery delivery service using the delivery partner they already have to address the user's grocery needs and perform all household related work like laundry, washing, picking up groceries, dropping kids to school etc

Launch the product or service in an iterative manner. First launch these products and services in places where there is maximum usage and thus the highest chance and opportunity of feature penetration.

Continously A/B test the feature and keep rolling it out

This will result in increase in demand for driver partners in Uber thus the situation can arise that there are not enough driver partners to carry out this task or the driver partners are overburdened with work which might cause frustration amongst them and lead to a bad experience

2) Targetting a new user segement for example elderly people. Booking cab via a phone call only for elderly people.Special design cabs for specially abled people (disabled people) and elderly citizens such that its more convinient for them.

Targeting new segment means we will have to personalise and make the features more related/catering to the target audience,this might require large amount of implementation effort and it is definitely possible that the user adoption for this is low.

3)Entering new markets

Won't be possible in a year's time hence we will drop this solution

Step 4: Now let's list down our evaluation criteria

Evaluation criteria should be broad and high level in nature, it should also be aligned to the company's goal and mission

Some of the evaluation criteria that we will choose for this problem are as follows:

Implementation effort required, Impact to end user, UX change, Cost

Step 5: Evaluating the solutions against all your evaluation criteria

Increase usage of existing users

1) By providing discounts, coupon codes and offer on rides for regular/frequent users.

We need to keep in mind that money/revenue gained due to increase in usage should be greater than the loss incurred due to discounts and low prices offered on rides

2) Bundling up both the features and providing free food delivery options for regular users

This will have very less UX change, will not require that much of an implementation effort as well. Will have a huge impact on end users and can have a positive impact on them to increase their usage which can directly lead to increase in revenue for Uber

Increasing the number of users

1) By Launching new products or services

This has a very high opportunity size, might have a huge impact size on the end user as well depending on the product/feature type.

There will be significant amount of UX change and also the amount of cost and effort that will be required will be very high

2) By entering new geographical locations (markets)

Entering new geographical locations/markets won't be feasible as one year is a very short period of time for this hence we won't be considering this solution

3) By targetting a new user segment

Targetting a new user segement for example elderly people. Booking cab via a phone call only for elderly people.Special design cabs for specially abled people (disabled people) and elderly citizens such that its more convinient for them

High impact, low cost, low-medium implementation effort, low UX change

Thus based on all the above solutions and evaluation metrics as a PM of Uber i will be going with the solution of increasing the number of users using the app/platform by targeting a new segment in this case its by providing features like phone call based app booking and specially designed cars/cabs for elderly people to improve revenue for Uber.

yogesh247 · Answer 4 · 2019-12-16T18:16:06+0000

Here is how I would approach this product strategy question:

1. Ask clarifying questions: Do we want to increase revenues or profits? Are we talking about just one vertical of Uber i.e. ride-sharing services or the entire company? Do we have a specific geography/region in mind? Is there a time frame in which we need to implement changes?

Here I will assume that we need to improve the revenues of the entire company in India in 1 year.

2. Tell your understanding of the product: Uber provides cab service through a mobile app in the major cities of India. The ride can be booked for an individual (UberGo) or can be shared among individuals (Uber Share). Uber Share targets price-sensitive customers while UberX, UberGo targets high-class customers. Uber Moto also targets the low-income population. Along with this, a cab can be booked for inter-city travels as well. Another service of Uber called as UberEats allows the users to order food from the restaurants through the mobile app itself.

3. Prepare a framework: Revenues can be increased by any of the following methods:

Increasing the number of users on the platform
Increasing the usages of the app by the existing users
Increasing the prices of our services
Diversifying into new verticals

Since we have a time limit of one year to show the results, we can ignore the fourth method of diversifying into new verticals. The solutions for the rest of the three methods are as follows:

4. Increasing the number of users on the platform: Users can be increased on the platform by any of the following methods:

Expanding into new territories:
Target a different set of users: for example, introduce specially designed cars for differently-abled persons, bus service for Bottom of the Pyramid (BOP) people, easy cab booking through a phone call for elderly people, etc.
Decrease the prices to gain share from the competitors. However, care must be taken to not reduce the prices up to a certain limit such that the consumer perception about the quality does not deteriorate

4. Increasing the usages of the app by the existing users: Usages can be increased on the platform by any of the following methods:

Start providing hyperlocal delivery services wherein a user can book an Uber driver to do regular household chores like bringing laundry clothes, purchasing "paan" at night, etc.
Bundle the cab and food delivery services. For example, for a specific number of rides made on Uber, you get some discount off food orders

5. Increasing the prices of our services: This may reduce the market share given that low and middle-class people may start opting-out from the service.

6. Evaluate the options:

	Pros	Cons
Expanding into new territories	No need to modify existing features	Will require new drivers May not be implementable in one year
Target a different set of users	Tapping the untapped market will give the first-mover advantage Easier to implement	Works well only if the size of the targetted niche market is sufficient
Decrease the prices to gain share from the competitors	Can eliminate the competition	Works well only if the revenue lost due to price cut is lesser than the revenue gained due to the increase in the number of users Competitor retaliation can lead to price wars
Start providing hyperlocal delivery services	Can use existing infrastructure by making certain changes	May require a considerable initial investment
Bundle the cab and food delivery services	A good strategy to increase number of food orders as well as cab rides Easy to implement	Will work only for those customers, who are potential users of both the services

7. Give final recommendations: I would suggest that Uber should make some modifications and design some specific vehicles to target certain niche segments. However, based on the time and cost constraints, other options can also be considered.

Bella Rubin · Answer 5 · 2019-12-16T05:16:39+0000

First I will ask some clarifying questions.

Next I will brainstorm solutions.

Last I will do a cost-benefit analysis to see which strategy to pursue and give my recommendation.

Clarifying Qs:

1. Revenue and not profit? Correct

2. Uber the ride-hailing/ride sharing app? Yes

3. Are we working on improving revenue for a specific product/feature/user segment (riders, drivers, Uber Eats) or the entire company? Entire company

4. Any restrictions or time-frames I should be aware of? No restrictions, you have one year

5. Are we looking to improve revenues by a certain percentage? 25%

Brainstorming quietly, then sharing...

Revenue is a function of price times quantity

Factors to increase prices:

1. Raise price for riders

2. Lower wages for drivers

Factors to increase quantities:

3. Offer promos to riders

4. Offer gift cards

5. Expand Uber Eats to deliver more than food; drivers can deliver packages from UPS store, shoes from local shoe repair, laundry from laundromat or cleaners

6. Form a partnership with the local government so Ubers do not have to pay tolls

7. Form partnerships with organizations who sponsor events to arrange for some of the money to go to guest transportation, this will encourage attendance at events and increase Uber's revenues

8. Partner with event platforms like Meetup or Eventbrite to arrange carpools for people traveling to and from nearby locations

Cost-benefit analysis

1 & 2 will have negative repercussions

3 & 4 are likely already being offered

5 can be cumbersome to implement, because a lot of infrstructure needs to be put in place. We need a Google API to pull all local shops and services, a platform to arrange user inputs and a place for drivers to confirm and ask clarifying questions.

6 can take a lot of time, legal work and legislation

7 & 8 are viable solutions, the agendas of both parties are aligned, organizers want to increase attendance at their events, and it is likely they have the guest's addresses or they can ask the guest if they want to share their address and be matched with other local attendees going. Also, instead of spending a certain amount on food, SWAG or an open bar, some budget dollars can be used as a stipend for guest transportation. So, to summarize, I would recommend the strategy to partner with event organizer platforms like Meetup or Eventbrite so they can either sponsor Uber rides for guests or arrange carpools for them.

Mohit Khatwani · Answer 6 · 2024-05-25T14:30:23+0000

Some clarifying points

Uber currently has following services
1. Rental - Rent a car let us say for 12 hours
2. City ride - Normal uber ride
3. Intercity - When you ride outside the city
4. Packages
5. Uber Shuttle
6. Bike rides

Is my understanding correct ?

Yes seems fine

For the sake of this exercise i will follow below structure

Mission, Type of users, Company, Competetion, Perception, Suppliers

Mission - To make Moblity and Transport of users easy and simple

Type of users/Customers

B2B & B2C

Drivers	Users
High Rating - 4Rating and above	High Freq (Uses 4 to 5 times a week, Yound Generation , Genz, Prefer convience over cost (Millenials too)
Mid Rating - 3.5 to 4 Rating and above	Mid Freq- Genx (Travel only when required may once in 2 week)
Low Rating - Below 3.5 Rating	Low Freq - Once in 1 to 3 months

Company - Uber allows users to book a ride for rental, for city rides and for Intercity rides. Also becuase it is know to provide cab servcies it migrated itself in to delivery of packages, bike rides and shuttle now

Competition - Ola, Gensol Enginnering ( Blue Smart)

Perception - Users know the Percetption of uber that it does a great job when it comes to tranportation and mobility and its not just prooven in india but across the world so there is a trust in mind of our users and they understand that uber is capable company with right technology/software keeping in mind the customer experience

Strenths and Weakness

Strenght	Weaknes
Easy to use service	High commisions for Divers
Software & navigation	Drivers can mis behave and be abusive
Great Customer experience

Despite of the of weaknes i think the most natural transition for uber can be in transport similar to Porter

Sol	Reach	Impac	Effort	Phase
1) We already have Riders/bikers who can register themselves for b2b service to deliver packages similar to Porter	M	M	M	1
2) For Other heavy duty luguages similar to how drivers come down and register on platform of uber , the transport drivers can register themselves and thier vehicle after passing a audit stage (KYC to be done)	L	L	L	1
3) users will have the ability to book a service and drivers can accpet the pick of luggage after engaging with user and confirming all details about luggae to avoid any misconception	M	M	M	1
4) Navigation and Prediction time for pick up and Delivery time	M	M	M	1
5) Customer support and Apps for Customer and Rider with payment integration	M	M	M	1
5) Post if this service is hit than we can open this service to for Mid size Truckers/Tempos and many other types of commercial vehicles	L	L	L	2

Devashish Verma · Answer 7 · 2022-07-01T20:51:39+0000

Clarifying Questions

There are multiple business functions under uber umbrella i.e uber rides, uber eats etc. is this specific to any business function -> No its for uber business
Any specific geography I should be targeting -> take for US
Any specific user segment-> I am aware that app users are more profitable compared to someone using the website and vice versa-> all users

Company and the product

Uber is a primarily ride hailing platform which also provides delivery service for food under the the brand uber eats. for this discussion I will primarily talk about uber rides as the same would be applicable for uber eats as well.

Its a two sided marketplace . one side of it are the riders who gets a ride and other side of it are driver who provides the ride. Its primarily a technology company which provides the platform and establish the pricing based one demand and supply

Let look at a transaction from ride hailing perspectives:->

Rider side-> uber will incur acquisition cost
Once riders are on the platform they take a ride and pay for the ride
Uber will share a certain part of the revenue to driver as driver commission
Uber will also incur some acquisition cost for driver-> CAC for driver

Profit will be defined as -> revenue earned - commission shared-CAC (customer+driver)

I am assuming we are not looking at technology cost here which is more of fixed cost

In order to increase the profitability , uber has following choices.

Strategic choices

Uber can increase the price per ride
Decrease the driver commission
Increase frequency of uses
Explore New business streams

Evaluate Strategic choices

Increasing the cost per ride can have repercussion and uber can lose market share to its competition i.e lyft . this can invite some negative press well as it happened for surge pricing so this is never an easy option. Uber can still look at this closely and try to find different customer segment and look at increasing the price for segment which are less price sensitive
1. Uber has uber go
2. Uber premier
3. Uber xl

I am assuming customers taking uber xl would be less price sensitive as they value experience over price. Uber should run some experiments here and try with different pricing

Decrease the driver commission
1. This will have a direct repercussion on uber business and driver might leave uber due to lesser commission. Most of the drivers are on both the platform so this step can't be taken
Uber can look at increasing the frequency of uses but its simply not possible as customers would not take ride unless needed. This is certainly a challenging area unless there is new product offering on platform customer. Here uber can explore a prebooking feature and tieups with theatre, cinemas so that when customers books cinema tickets it prompts them to book an uber.

It will be bit challenging to meet the demand supply as someone going to watch a cinema doesnt want to be late. This is something that can be experimented with a segment which prefers convenience over anything else.

Uber already has vast customer base which currently gets uber rides or uber eats. From the list of users, uber can try to understand different customer segment
1. Segment who only takes ride
2. Segment who only order from uber eats
3. Segment who do both

This analysis should help them understand if the customer would be open to ordering grocery from uber. Given that customers are already on the platform the CAC would be nil. The experience can be built within the app and can be started with essentials i.e milk, bread ,butter, snacks and then expand to full fledged. Here the value prop would be delivery time.

It can also look at tapping a new business segment of delivering goods for B2B partners. Kind of last mile delivery service for ecommerce companies. In my opinion this may not work on unit economics for ecom companies as they are not time bound delivery so this is something that can be explored as a long term opportunity

Abhinav Chitre · Answer 8 · 2021-07-20T16:25:20+0000

Increase revenue

Do you mean overall revenue? Average revenue per user / per ride ? Overall revenue

Which market? India

Current business model of uber : 20 % to 25 % commission on every ride

how can we increase revenue?

1) Increase commission percentage ?

2) Increase number of rides

3) Increase charges per ride (charge per km)

4) Increase high cost rides compared to low cost rides

5) increase number of users

6) Introduce subscription model

7) Diversifying into new verticals

Increase commission percentage

This option will end up in a backlash by the drivers against Uber and they may end up leaving the platform and moving to Ola or other services.

Increase number of rides completed / Increase number of users

1) Flat charges for airport for Uber go and uber SUV from city from different locations

2) Flat ride prices for distance below 5 km with zero surge pricing

3) Tie up with Multiplexes/Shopping complexes to create a Uber zone similar to airport : Special personnel for people who do not have apps : some revenue sharing between multiplexes and Uber

4) Tie up with Zomato / EasyDiner to send notifications to user to book cabs to destination, cheaper ride passes to destination ; buy on easydiner or zomato table booking

5) tie up with event organizers to create cheaper rides to the event and uber zones outside event venues ; send notifications to book Uber rides to event

6) Allow non app users to book cabs through Uber zones and pay by Cash ; Create Agent Users who can book on behalf of users.

Increase charges per ride (charge per km)

We will need to evaluate the impact of this on number of rides requested. It should not have a negative impact of number of rides requested.

Increase high cost rides compared to low cost rides

We can unlock cheaper upgrades for riders who complete x number of rides from uber go to Uber X or Uber X to Uber SUV : Show how much they can save on Uber X

Introduce subscription model

Create a program similar to Uber pass for Rs x per month

1) where no surge pricing is applicable

2) free x rides per month

3) flat Rs x per km cheaper than non gold members

4) high rated drivers with no cancellation rule for drivers

Diversifying into new verticals

Open Pick up and Drop delivery services similar to Dunzo which can be expanded into grocery delivery or other categories.

Recommendation

Open delivery services similar to Dunzo

(Easier to implement from a tech standpoint ; High impact low effort)

Tie up with Multiplexes/Shopping complexes to create a Uber zone similar to airport : Special personnel for people who do not have apps : some revenue sharing between multiplexes and Uber

(Less cost to set up a Uber zone outside shopping complexes / malls; higher impact as non app users can also book cabs)

Tie up with event organizers to create cheaper rides to the event and uber zones outside event venues ; send notifications to book Uber rides to event

(Events can significantly increase number of rides completed; logistically better for drivers also;)

Ashish Pandey · Answer 9 · 2020-08-07T12:21:23+0000

Clarifying questions:

1. This is applicable for Uber Rides or Uber Eats? Ans: Rides.

2. Are we thinking only about Revenues or Profitability too? Ans. Revenues

3. Any particular segment like Uber X, Micro etc we r targeting? Ans. All

4. Are we targeting any particular user group(s)? Ans. All

Understanding of Uber Rides' Revenue model:

It makes money by charging a cut from drivers' billing to riders. So

Uber Revenues = billing * %age_commission

billing = num_rides*avg_distance

num_rides = num_riders*avg_rides

so the equation boils down to

Uber Revenues = num_riders*avg_rides*avg_distance*%age_commission

So increasing revenues might result from increasing any of the above factors with condition that it compensates fall, if any, in any other factor. Lets brainstorm strategies of doing so for each factor:

num_riders & avg_rides: these can be increased on an average if people wanna use uber more and more people use Uber. While this can be increased by decreasing rates but some other strategies like

1. Giving them option of subscribing uber for office commute for a fixed price,

2. Automatic upgrade for a very small fee from say Micro to Mini or from Mini to X when upgraded segment is witnessing lower usage say during afternoon

3. Automatic offering return trip for a slight lesser rate than usual rate

avg_distance: would be autmaticaly taken care by above measures.

%age_commission:

4. This can be increased but we need A/B kind of testing for sample(s) across sectors, routes, time of day, types of trip etc to arrive at some relevant numbers by trade off between increased revenues for Uber vs impact on drivers' income.

From timeline and cost of implementation point of view I see 1, 2 & 3 as priorities. 4 needs testing across timelines and only over a period of time solution might emerge.

Next set of brainstorming can emerge if we analyse user group and frequency of usage:

a. Mostly daily commuters, young, 25-45 age.

b. 45-55 age group who are concious about money but need more convenience, not very frequent user

c. 55+ age group are most infrequent users but have plenty of travel time.

a. set of users is pretty much aware about uber and doesn't need much incentive to increase the usage.

b. & c. we can focus on by offering them premium options at cheaper rates during off peak timings.

Metric:

1. Increased rides/riders/utilisation of cabs/revenues.