What is the Lifetime Value of an uber user?

Clarifying questions

-          LTV in my understanding is the total revenue customer gives to a company à Yes

-          Since, the pricing and demographics plays a major role in service industry, I am assuming the market to be India à Yes

-          Are we talking about average lifetime value à Yes

-          I am assuming the lifetime value is only from the core ride hailing service à Yes

Exploring further

-          Uber is usually available in Tier 1 and some Tier 2 cities in India

-          There would be various types of users

o   Dormant à used less than a year

o   Low frequency à 2-4 times a year

o   Medium frequency à 1-2 times a month à 12 – 24 times a year

o   High frequency à 1-2 times a week à 40 – 80 times a year

-          Different types of travels

o   Intercity – 90% trips

o   Outstation – 10% Trips

Formula – Average Lifetime value of customer

ALTV = Intercity + Outstation [(Avg. trips per year) X ( Avg trip cost) X Avg lifetime usage years ]

Assumptions

1.      Avg span of user association = 20 years

2.      Accounting only intercity trips

Total  ~ 1,45,000

Avg life time value of customer in India = 145K assuming only the intercity trip in present value money