How does UBer/Lyft,etc measure what city is best and how do they approach it? Net Revenue could do it but what about other metrics like n° of new users, avg riders per user, etc... Market share should be a big factor but how do they know which city is better?
Hi Anonymous,
I founded a company with a city-based approach similar to the one of Uber and Lyft. The main criteria that we took into consideration to open new cities were:
In our case, costs where pretty similar whatever the city opened, therefore we concentrated more on the revenue side. With other models, acquisition cost and set up costs could also be relevant criteria.
Ad Vlad said this is more relevant in the initial stage, after that you consider more a country–level expansion rather than a city–level one (potentially with similar criteria).
Hope this helps,
Francesco
Hi,
I've been working at Lyft. That's a strange question. The companies are not deciding which one is better since the end goal is to be everywhere. You just have the cities with a big population and a long tail of small cities. If you are at the early stages, obviously you prioritize bigger population. Short tale requires different operating models and has population cutoffs as well.
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