Demand and Supply increased by 10% but total booking was down by 10% for a particular week, Why?
Question
I work at Uber and found out that for a particular week, number of drivers who signed up for the service increased by 10% and so was the increase in the number of users using the app. But, the number of booking showed a decrease of 10%.
This was based on a Week on Week comparison. Jot down all your hypothesis.
There are good reasons for this trend and the person with the maximum correct reason will get the best answer upvote
This is a real interview question asked in one of the interviews at Uber
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Answers ( 24 )
– are there holidays in that particular week? i.e. major festival
– in one city or region drop in bookings there , then need to drill down the particular region.
-if not a holiday week or not a particular region, surge can be one reason.
– Surge pricing need to be checked ( users might not be booking due to higher surge price)
-if surge is not there, cancellation by customer need to be checked.
– app crash
Total booking might not just depend on the demand, it might depend on other factors like the income of the people, the area where the uber is being taken to and trasportation facility as well. As demand increases and supply increases, there might be reason where people do find themselves with better income and can afford cars for their own.So thus other factors might also affect this.
a. Need to find if decrease in bookings has happened in a particular place/city/area ?
b. Need to find if decrease in bookings has happened during a particular day or time or time period ?
Possible reasons:
1. If Price has been increase by Uber or higher rates are applicable during the peak time
2. Competitor is offering lower rates
3. Better facilities provided by competitors
4. External factors (pandemic/holiday/etc. )
First we need to know on which city this has occurred. Because, in India, cities like Bengaluru will have less booking during long weekend/ public holidays since most people would have traveled to their hometown.
There might also be strike, bandh or some natural calamities like rain/flood which has affected the booking.
If the location of the drivers and the users are not the same, it will result in longer wait time for user. So they might check the wait time and opt for other mode of transportation.
People might also check the price and opt to different transportation mode. So price surge should also be checked.
Statement : Number of drivers and users have increased for week ‘n’ by 10%, however, booking decreased by 10% when compared to week ‘n-1’
Plausible Reasons:
– Whats the average number of cabs available in a 5 KM radius, comparing it with last week’s data might give us a lead.
– Is there any technical glitch users are facing while booking the cab from the app?
– Is there any technical glitch in the app for drivers in order to make themselves available for the users?
– Is there any UI defect?
– Why not new users are signing up? What can be the possible friction points? Maybe, Ola or X,Y,Z are offering something which we are not aware of?
– Are we providing some kind of incentives to the new users? Users are not willing to avail these offers? Why not?
– Does the consequent week have same number of working days? We can check if a holiday falls in the current week, if yes, there is a 15% less opportunity for the users to use the app
– Considering current Covid situation, is there any lockdown announcement by the local authority that might impact the regular customers
– Is there anything wrong with our Surge Pricing algorithm? Are our fares greater than our competitor? What is causing it?
– How the numbers are with our most loyal cutomers? Loyalty is the most important KPI which needs to be looked at. If these segment is performing well then, the decline might be temporary. If not, we need to start new customer engagement campaigns in order to get them back
– Did some bad incident happened recently which came up in the news? E.G. Misbehavior with a female customer and it hit the news. This kind of news spreads like fire, it can shoo customers away
In the aprticular week –
1. Minimal Decrease in the prices or new offers by competitors
2. Users increased may be to cross-check prices
3. Increase in users, but booking decrease due to high traffic in that week due to marriages in some aprticular area.
4. Technical glich in the app which is delaying the process of booking a cab
5. Temporary media news that affected the image of the company and users shifted to the rival company.
-Check the profile of the users, are these regular or first timers.
-Basis above of it is later, then definitely it a app glitch leading to failure in final bookings, if ot is later then customer are churning to other providers for better discounts, offer etc.
-Check the external factors lole lockdown announcement, bad weather etc which can influence the booking rate.
-Check if the competitor launches some offers in the same period .
In week to week comparison will see if there is some trend in change at particular timings, regions, or route.
Depending upon analysis following could be the factor possible
1. Maybe fare offered by uber is tend to be high as compared with other service apps.
2. Another reason could be change in interface that minght not be user friendly or might not be liked by users.
3. There could be lag or high response time which led user to lesser booking
4. There might be restrictions imposed in city for travelling (currently lockdown) hence low bookings.
5. Might possible there are more number of holidays in a week, leading to decline in booking by office workers.
6. There could be a reason complaints on customer care wasn’t satisfied in past upcoming weeks lead to decline in booking
1. Drivers are more in number than users
Causes:
Lockdown situation,
Holidays
Users moved to villages
Wfh opportunity was provided from this week Only
Increase in fuel prices have caused increase in surge pricing
Sudden rains in the city and people can’t go out
Possible causes:
Technical glitch
place where more bookings came from have less number of drivers present at that time
Seasonal effect – rainy ( where there are more people stuck at a place ( movie,mall)
Surge in prices led to less number of bookings
Though number of drivers signed up increased, most of them didn’t turn up
Most of the drivers were not qualified
Labor protests happened nin this week so drivers weren’t available
1. Number of customers using the app increased but all the increased customers are for cab services ? As uber offer various other services as well, there is a chance that increased customers belong to different portfolio.
2. Another possibility, availability of the drivers, although the drivers are increased, there is a chance people have taken booking for longer routes or intercity travels, due to which overall bookings are impacted, it is no where mentioned that revenue is impacted, only booking percentage is impacted.
3. Maybe the decline is temporary due to a natural calamity or political situation in the area in question.
4. Was there any server downtime reported in that period, are we having updated stats of booking or is there any missing information.
5. Drivers were available on different route and demand was from the different route, although demand and supply both have increased but fo not meet.
1. Number of customers using the app increased but all the increased customers are for cab services ? As uber offer various other services as well, there is a chance that increased customers belong to different portfolio.
2. Another possibility, availability of the drivers, although the drivers are increased, there is a chance people have taken booking for longer routes or intercity travels, due to which overall bookings are impacted, it is no where mentioned that revenue is impacted, only booking percentage is impacted.
3. Maybe the decline is temporary due to a natural calamity or political situation in the area in question.
4. Was there any server downtime, are we have missing information in our data.
5. Drivers were available in different route and demand was in different route, although demand and supply both increased but did not meet.
1. Number of customers using the app increased but all the increased customers are for cab services ? As uber offer various other services as well, there is a chance that increased customers belong to different portfolio.
2. Another possibility, availability of the drivers, although the drivers are increased, there is a chance people have taken booking for longer routes or intercity travels, due to which overall bookings are impacted, it is no where mentioned that revenue is impacted, only booking percentage is impacted.
3. Maybe the decline is temporary due to a natural calamity or political situation in the area in question.
4. Was there any server downtime, do we have missing information in our data.
5. Drivers were available in different route and demand was in different route, although demand and supply both increased but did not meet.
By doing week by week comparison the following factors can affect low booking
1. There might be some national holiday i.e (election day,festival) as companies think that there would be festival, this can lead to increase in demand
2. while persons searching, again and again, the particular location in different devices to see if price
reduces this lead to increase in demand and prices goes up and users ended up with other company.
This might occur due to the following reasons:
– Sudden rise in prices of the bookings owing to the increase in demand (growing number of users signing in Uber app)
– A possible mishappening related to the driver and the customer
– Signing in for considering traveling but then found that prices are high as compared to that of some other company providing the same service
– An occurrence of some natural calamity in that specific week
– Celebration of some festival in the city
– Issues while booking cabs from user-end
– Issues while accepting orders from driver’s end
from the given case we know that there is an increase in signed ups which means there is some festival or public event that week.
The decreased in booking, 1. Drivers were not available.
2.High competitive pricing
3.Traffic
Hypothesis 1:
– There was an important event coming up, which got cancelled at the last minute.
Hypothesis 2:
– There was an offer given by Uber but the competitor came up with a better offer.
Hypothesis 3:
There was an offer given by the Uber but the environmental factors (rain, storm or other external factors) kicked in which in turn affected the no of users who could use the offer.
Hypothesis 4:
There was a holiday season, which got affected due to some sudden external factors.
–
Number of drivers and users have increased for week ‘n’ by 10%, however, booking decreased by 10% when compared to week ‘n-1’
Possible Reason
– Whats the average number of cabs available in a 5 KM radius, comparing it with last week’s data might give us a lead.
– Is there any technical glitch users are facing while booking the cab from the app?
– Is there any technical glitch in the app for drivers in order to make themselves available for the users?
– Is there any UI defect?
– Why not new users are signing up? What can be the possible friction points? Maybe, Ola or X,Y,Z are offering something which we are not aware of?
– Are we providing some kind of incentives to the new users? Users are not willing to avail these offers? Why not?
– Does the consequent week have same number of working days? We can check if a holiday falls in the current week, if yes, there is a 15% less opportunity for the users to use the app
price may be less with competitor
check with price of competitors
check any discount provided by the competitors during peak
There maybe holidays in the previous week.
Drivers and customers, both increased but bookings were decreased
Possible causes:
– more people joined to compare prices with competitor service provider.
– prices were high at peak time, people shifted to other service provider.
– natural causes like heavy rain, more traffic on particular week, festival season, such that people were not intrested to go out
– drivers may have taken long route bookings, decreasing the number of booking they do generally.
– server error
Drivers and customers, both increased but bookings were decreased
Possible causes:
– more people joined to compare prices with competitor service provider.
– prices were high at peak time, people shifted to other service provider.
– natural causes like heavy rain, more traffic on particular week, festival season, such that people were not intrested to go out
– drivers may have taken long route bookings, decreasing the number of booking they do generally.
– server error.
–
– First ride off/ discount on first ride which would have lead to more people joining the service and using the app
– meanwhile decrease in prices of competitor could have lead to a decrease in bookings but only by 10% as it would have been compensated by new people using their first ride coupons.
-Surge of prices
-New users are not offered much discounts as compared to old loyal customers.
-Users increased due to just cross checking prices in two apps
-High response time of drivers.
-App crash