Tell us of a problem with a product which bothers you.

● How would you use technology to solve the problem?

Propose more than one potential solutions (max 3).
● Compare and choose the best solution for the problem.
● How would you measure whether the proposed solution is
working?
● What might be the reason for this solution to fail ?

Mallika Singla

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 Index
1
Understanding the Problem
Surge pricing by UBER due to increase in demand

2
What can be done?
● Suggested solutions
● Comparative study of solutions

3 Understanding Benefits
● Customer’s point of view
● UBER’s point of view
4
Execution Plan
Understanding technical implementation

5
Measuring Success and Failure
What can go wrong and why?

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 Understanding the Problem:
Surge pricing by UBER due to increase in demand
Uber Technologies Inc. (doing business as Uber) is a peer-to-peer ridesharing, taxi cab,
food delivery, bicycle-sharing, and transportation network company

What is Surge Pricing? Need for Solution?

● Demand for Rides
increase
● Prices go up
● Riders pay more or wait
● Some customers cannot afford the hiked
prices
● No assurance of price drop even after
waiting for long
● Generic reliability reduction for the service
provider

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 What can be done?
Solution 1:
1 Customer quotes desired price

2 Notification is sent when surge is over or

desired price is reached

3 Assurance of getting a cab for all customers waiting

for a surge drop notification

4 Additional incentive given to customers who book cabs

post surge drop notification

5 Heavy cancellation fee, if cab is cancelled post surge drop

notification

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 What can be done?
Solution 2:

1 UBER analyses customer route patterns

2 Suggest monthly/quarterly passes according

to regular travelling patterns

3 Regular customers get fixed prices despite surge

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 Comparing Solutions
Solution 1: Solution 2:
Surge drop Notification Monthly Pass System
Benefited Caters to all customers except those Caters to only regular and loyal UBER
Customer who have urgent need customers
Segment
UBER Revenues are being earned by
Revenues increased by ensuring
Revenue increased volume due to increase in
customer loyalty
demand

Executional Add-on feature on current App without

Extensive mathematical modeling
feasibility required to predict correct pass price
extensive mathematical modeling
at regular intervals of time

First solution is better as it caters to ALL customers, INCREASING UBER revenues and
WITHOUT EXTENSIVE App re-modelling
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 Customer Point of View

1. Do not have to pay high surge prices if

they are willing to wait for some time.

2. Greater reliability on Uber and greater

assurance of getting a cab at the
regular cost.

3. Can multi-task rather than having to

continuously refresh the Uber App
while hoping for a dip in prices.

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 UBER’s Point of View
Customers who have urgency will take expensive cabs in any case. Other (larger section)
customers can also be catered for using this solution.

1 Gain profits by volume rather than by

price

2 Have accurate data points for demand

estimation in the near future

3 Prevent loss of customers

4 Rather, win customer loyalty

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 Execution Plan

Back-End Front-End

● Add extension to the ● Price quoting segment

existing App
● Checkbox for surge dip
● Redirect drivers to regions notification
that have greater demand
● Notification after surge
end

More accurate demand estimation in the near future

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 Measuring Success and Reasons for Failure
If nobody wishes to quote a price or opt for a surge
No. of customers quoting price/
01 opting for surge dip notification
dip notification then it will be fair to assume that
generally customers do not prefer waiting at all.

No. of customers booking cabs High booking rate, post notification implies that
02 right after the notification customers are gaining from the add-on feature

Reduction in waiting time to get new rider implies

Reduction in driver’s waiting time
03 in getting a new customer
increase in the number of rides per driver.
Pre-estimation of demand plays an important role

High Volumes v/s High Price Cost benefit analysis in comparison to the previous
04 Analysis to check Profitability surge pricing model

05 Measure customer satisfaction Increase in Net Promoter Score for UBER customers

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