Form cover
Page 1 of 1

Short on Supply, Long on Problems!

Problem Statement:

Due to an operational inefficiency, 300 drivers and 300 riders are leaving the Uber platform every day. With a limited team size, where should the business focus? Options: Driver side Rider side Equal Focus None, It’s Okay
Answer: Driver Side

Solution:

While losing both drivers and riders is problematic, the impact of losing drivers (supply) can be more alarming in this case. According to Uber’s 2023 filings, Bangalore had 22,000 active drivers and 450,000 riders. Losing 300 drivers daily equates to 1.36% of the driver pool, which is a significant hit to the supply side. Meanwhile, 300 riders represent only 0.07% of the total riders, a much smaller fraction.

Driver availability is crucial for maintaining platform functionality. If too many drivers leave, Uber will face challenges meeting rider demand, leading to a negative user experience, longer wait times, and potential loss of even more customers.

Given the disproportionate impact on the driver pool, Uber should focus on the driver side to stabilize supply and maintain its core service offering.

Lookalike Businesses with Critical Supply Side:

Swiggy/Zomato: The availability of partner restaurants is crucial. If restaurants stop partnering with Swiggy, the platform will struggle to offer variety to customers, leading to a decline in orders and customer satisfaction.


MakeMyTrip/Yatra: Airlines and hotels are the backbone of travel bookings. Without enough partners, the platform cannot offer competitive rates or availability, reducing its value to customers.


Ola/Rapido: Like Uber, Ola relies on its drivers to meet ride demand. A shortage of cabs leads to longer wait times and fewer ride options, directly affecting user retention.


Airbnb: The platform thrives on hosts listing their properties. If hosts start leaving, the platform’s accommodation options shrink, making it less appealing for travelers and reducing overall bookings.


Spinny/CarDekho: As a used car marketplace, Spinny depends on a steady supply of cars from sellers. Without enough cars to offer buyers, the platform loses its appeal, slowing growth and sales.


Takeaway

Retaining the supply side is critical for any business reliant on a marketplace model like Uber. In this scenario, driver retention is far more important than rider retention, as even small supply-side losses can lead to larger operational issues. Businesses need to prioritize stabilizing supply to avoid inefficiencies, lost revenue, and customer dissatisfaction. A delicate balance between supply and demand is necessary, but the supply side often requires more urgent attention to sustain growth and customer satisfaction.

Rate this challenge and solution

Rate this challenge and solution
Subscribe to get daily challenges (no payment required) : https://zrosh.com/subscribe