You are PM at Uber. Devise strategies to improve revenue.
  • Suggest solutions which doesn't involve too much cost.
0 votes
195 views
  • Suggest solutions which doesn't involve too much cost.
in Strategy by (79 points) | 195 views

2 Answers

+1 vote

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.

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by (48 points)
+1 vote

Here is how I would approach this problem:

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:
 ProsCons

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.
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by (52 points)
0

fantastic answer yogesh247

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