For a market sizing, how to get the revenues of Uber (ride hailing) in UAE. How do i go around this one without it being too complex?
I feel like there's no way to break it down for the frequent passengers/occasional ones and link the distance travelled for each
Does anyone have an efficient workaround? Detailed answers are most welcome
Detailed answers probably come when people are compensated for that time ;)
You'll learn a lot more from this by trying it out yourself first! Why don't you post your approach here and we can provide commentary?
By the way, I've built a case that is extremely similar to this one here: https://www.preplounge.com/en/management-consulting-cases/brain-teaser/intermediate/taxis-in-manhattan-market-sizing-229
How to approach market sizing
It's very simple: Do the approach the is the easiest for you given the question.
Are they asking you to estimate something where you don't even know where to begin from the top (maybe you have 0 clue as to the market size of the industry, the GDP of that country, etc. etc.)? Then do bottom-up!
Alternatively, does it seem impossible to do a realistic from-the-ground-up estimation of something (perhaps it requires just far too many steps and assumptions)? Then do top-down!
Fundamentally, you need to take the approach that just makes the most sense in that circumstance. Quickly think about the key assumptions / numbers required and whether you 1) Know them or 2) Can reasonably estimate them. If you can, go ahead!
An Example
He's a Q&A for a great market sizing question here asking to estimate # of electric charging stations in a city in 10 years:
This one could be answered top-down (as I did) by estimating population of the city, # of drivers/ cars, etc. etc.
OR, it could be answered bottom-up by estimating # of stations you see per block (or # of gas/petrol tanks), % increase this might be over time (or # of EV stations that would be needed per gas tank given EV stations take 10 times as long), and # of blocks you'd estimate the city to have.
Take a look here for additional practice! https://www.preplounge.com/en/management-consulting-cases/brain-teaser/intermediate/taxis-in-manhattan-market-sizing-229
When it comes to estimating the revenues of Uber in the UAE for a market sizing exercise, it can be challenging to obtain precise data on a company's financials. However, as a strategy consultant, it's important to demonstrate your ability to think logically and approach the problem using a structured framework. Here's an efficient workaround to estimate Uber's revenues in the UAE:
Define the scope: Clarify whether you're looking for Uber's total revenues in the UAE or just the revenues from their ride-hailing service.
Utilize available data: While you may not have access to Uber's specific financials, you can leverage publicly available information and industry benchmarks to make reasonable estimates. Consider the following sources:
a. Market size: Estimate the total size of the ride-hailing market in the UAE. You can use data on the number of registered Uber drivers, average fares, and the number of rides taken per day or month.
b. Market share: Determine Uber's market share in the UAE by comparing it to its competitors, such as Careem or local taxi services. This can be done through surveys, interviews, or industry reports.
c. Revenue per ride: Estimate the average revenue generated per ride by considering factors such as average fare, surge pricing, and commission rates charged by Uber.
Assumptions and calculations: Make reasonable assumptions based on your research and calculate the revenues. For example:
a. Assume the number of rides per day or month in the UAE.
b. Estimate the average fare per ride based on available data or industry benchmarks.
c. Apply Uber's commission rate to calculate the revenue generated per ride.
d. Multiply the estimated revenue per ride by the number of rides to get an approximation of Uber's revenues in the UAE.
Remember to clearly communicate your assumptions and limitations during your analysis. It's essential to demonstrate your logical thinking and ability to make informed estimates based on the available information. Good luck with your market sizing exercise!
Hi there!
Would be great if you could provide a proposal (ideally two) and then we can chip in with some feedback.
What matters at the end of the day is not the solution, but how you choose to go about the exercise. I recommend candidates to then practice coming up not with one approach, but several because this then triggers your lateral thinking abilities.
Best,
Cristian
