UBER DEMAND SUPPLY GAP

Business Problem

We may have some experience of travelling to and from the airport. While trying to use a cab service like Uber,
we face problems of cancellation by the driver or non-availability of cars.

Well, if these are the problems faced by customers, these very issues also impact the business of Uber. If
drivers cancel the request of riders or if cars are unavailable, Uber loses out on its revenue.

Objectives

The aim of analysis is to identify the root cause of the problem (i.e. cancellation and non-availability of cars)
and recommend ways to improve the situation. As a result of the analysis, we should be able to present to the
client the root cause(s) and possible hypotheses of the problem(s) and recommend ways to improve them.

Note: For this case study, only the trips to and from the airport are being considered.

Methodology

1. Visually identifying the most pressing problems for Uber.

• Creating plots to visualise the frequency of requests that get cancelled or show 'no cars available';
identify the most problematic types of requests (city to airport / airport to city etc.) and the time slots
(early mornings, late evenings etc.) using plots

2. Finding out the gap between supply and demand and showing the same using plots.

• Finding the time slots when the highest gap exists

• Finding the types of requests (city-airport or airport-city) for which the gap is the most severe in the
identified time slots

Data Understanding
There are six attributes associated with each request made by a customer:

• Request id: A unique identifier of the request

• Time of request: The date and time at which the customer made the trip request
• Drop-off time: The drop-off date and time, in case the trip was completed
• Pick-up point: The point from which the request was made
• Driver id: The unique identification number of the driver
• Status of the request: The final status of the trip, that can be either completed, cancelled by the driver or
no cars available
Session Details

• Late Night: Midnight to 4AM

• Early Morning: 4AM - 8AM
• Late Morning: 8AM - Noon
• Afternoon: Noon - 4PM
• Evening: 4PM - 8PM
• Night: 8PM – Midnight

Observations

1. Maximum number of "No Cars Available" status trips can be seen in Evening Session (Time Slot: 4PM to
8PM), followed by Night session (8PM to Midnight).

2. Maximum number of "Cancelled" status trips can be seen in Early Morning Session (Time Slot: 4AM to
8AM), followed by Late Morning session (8AM to Noon).
 1. Maximum Cancellations happen in "Early Morning" (4AM-8AM) session where the pick up is "City",
followed by Late Morning session (8AM-Noon)

Inference:
Most number of cancellations happen in the Morning hours (4AM-8AM) in the City to Airport route
 1. Maximum "No Cars Available" trips happen in "Evening" (4PM-8PM) session where the pick up is
"Airport", followed by Night session (8PM-Midnight)

Inference
Most number of No Cars Available happen in the Evening Hours (4PM-8PM) in the Airport to City route
We see that maximum trips are cancelled from City to airport in the Early Morning session followed by Late
Morning Session
We see that maximum number of "No Cars Available" from Airport to city in the Evening session followed by
Night Session
Lets Try to understand the Supply and Demand curve by considering all Trips Completed as Supply and
Cancelled and No Cars Available as Demand.

We observe that the Demand is very high in the morning from City to Airport route but the supply is very low
We observe that the Demand is very high in the evening in the Airport to City route but the supply is very low

Correlating these two plots, a possible hypothesis could be:

1. The demand during morning and afternoon hours from the Airport to City is quite low, which means
that a driver who completed a City to Airport route in the morning hours may have to wait a really long
time to get a ride back to the city, or he may have to come back without a passenger. Both situations are
not idle for drivers, which might be the reason for highest number of "Cancelled" trips in the City to
Airport trip in the morning hours
2. The vice versa happens in evening when there are too many flights coming in to the airport and hence
there is a high demand for cabs and not enough supply. which is why maximum number of "No Cars
Available" were observed in Evening in the Airport to City route.

Possible Solutions:

1. Give incentives/surge pricing/bonus for trips from City to Airport during Morning hours.
2. Give incentives/surge pricing/bonus for trips from Airport to City during Evening hours.
3. Uber can give Gas expense to drivers when they return from Airport without a ride or go to the airport
for pick up without a ride.
4. Uber can increase market share by marketing campaigns and offers to customers when demand is low
5. For bridging the demand supply gap from airport to city, making a permanent stand in the airport
itself where the cabs will be available at all times and the incomplete requests can come down
significantly.
6. Last but sure solution to bring down the gap is to increase the numbers of cab in its fleet.