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How to estimate the market size for Uber in UK

Market sizing Taxi
Recent activity on Feb 04, 2019
3 Answers
4.1 k Views
Tobias asked on Feb 03, 2019

Hi all,

I sphave been trying to answer this market estimation question with some difficulty. I haven’t been able to answer this in a convincing way.

How would you receommend answering this? I started with #uber trips X price per trip, but I struggled to breakdown how I would find out the total number of Uber trips. Could be segmented into porfessoinal/personal use; service chosen (e.g. Uber X, Pool & Lux); geography; age range... I’m stuck.

Thanks in in advance for your suggestions.

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Dennis replied on Feb 04, 2019

Starting from the number of rides taken and avg. price/ride I would assume the demand of rides is stable and can be met by the supply. That's why I would start from population and move forward > smartphone owners> active smartphone users> percentage who downloaded the app> regular users of the app> segment into business and private use> estimate how many rides/week the avg. person in the segments takes>> arrive at # of Uber rides.

Price: estimation for the segments (business: trips to airport/train station can be longer, private a few short trips on the weekend outside of public transport operating hours)

Combination of price and # of Uber rides

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Vlad
Expert
replied on Feb 03, 2019
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

I would use the following logic:

1) When I open the Uber app I see xx available cars covering some area

2) Assume some utilization rate for peak / off-peak and apply it to get the total number of cars in your area

3) Multiply that area by the number of similar areas to cover the city (ajust to how busy your area is)

4) Make assumptions re av. rides length to calculate rides per hour (don't forget to include utilization rate you've used before). Make sure to segment the day by peak / off peak time

5) Multiply rides per hour by the number of cars in peak / off-peak and operating hours to get total rides

Best

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Lucas replied on Feb 03, 2019
Got the McKinsey offer!

For the number of trips:

Assume each trip takes 10 minutes in average, also assume it takes 10 minutes riding empty to find a customer, this will bring you to one trip every 20 minutes (or 3 trips per hour).

Now estimate how many hours (in average) an uber employee work per day, so let's say 8 hours. With that you can reach 24 trips per day.

With the average fare for UK you should be able to estimate the market size /day /month /year...

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