Bangkok motorbike

Since this is a candidate-led case, the candidate should drive the case from start to finish.

This is a fairly simple case, but candidate will receive a lot of info & data verbally, so the case is meant to test a candidate's ability to remember info & data provided verbally and if they can summarize it and use it.

This case also helps the candidate to practice note-taking & listening effectively.

Style:

Candidate-led (usual style)

Topics:

Market sizing, Profitability analysis Market sizing, Profitability analysis

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Case Prompt

If you have ever been in Bangkok, you would have noticed these motorcycles transporting people from A to B as an alternative means of transportation. These motorcycles typically transport people on short distances such as nearby train stations, supermarkets or food stalls.

Your job is to estimate how much profit a motorcycle can generate in a month’s work meaning that you have to estimate both revenue & cost to be able to estimate profit.

Exhibits

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Sample Structure

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I. Background

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Background information that can be shared upon request:

Each motorbike-driver is assigned to a station from which customers are served.
Each station has 5 drivers.
The motorbike delivers the passenger to the destination, then drives back empty and waits his turn. This is done so that each driver transports the same number of passengers as part of a fair distribution system.
A driver can therefore only benefit from morning rush or evening rush depending on his/her location. If a driver's station is nearby an office building for example, they only benefit from the evening rush.
Most rides take about 10 minutes and are between home/office and metro-station or home/office and nearby restaurants.

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First, candidate should explain his approach by saying that he wants to estimate revenue first, then costs and then profits.
If candidate isn't familiar with the country or business, he should ask questions to get more information or data.
The candidate should also think about the data or information he needs to calculate profits.

To start the case off, candidate should ask for more background information on this motorbike business. If he already knows about it, he should still ask for background info so he doesn't make any wrong assumptions.

II. Analysis

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Below is the information that can be shared upon request:

Working hours

Each driver works 14 hours a day from 06.00 AM to 08.00 PM. Drivers work 7 days a week. On Friday & Saturday night, drivers work until midnight to benefit from entertainment traffic.

Lead-times

Each ride takes about 10 minutes including the empty return-drive to point of pick-up/assigned station.

Rush hours & capacity

Morning rush-hours on weekdays are from 06.00 AM to 09.00 AM - drivers work at 100% capacity. No need to wait in line. Evening rush-hours on weekdays are from 05.00 PM to 08.00 PM - drivers work at 100% capacity. No need to wait in line. Off-peak hours on weekdays and weekends drivers work at 50% capacity due to limited demand. Rush-hours on friday/saturday-nights from 08.00 pm to midnight, drivers work at 100% capacity. Remember that driver benefits only from morning or evening rush, not both. If a driver benefits from morning rush, his/her evening rush is similar to off-peak hours, so operating at 50% capacity.

Revenue

Each ride costs $0.50 cent.

Costs

Monthly installment payments are $30. Monthly permit fees are $50. Monthly gas expenses are $100.

Note for Interviewer

Share Table 1 with candidate if required.

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Candidate should ask for data & information to calculate revenue & costs.

Calculating number of rides

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Assuming our driver benefits from morning rush hour, we can calculate the number rides during:

Peak-hours on weekdays. Off-peak hours on weekdays. Peak-hours on weekend-nights. Off-peak hours on weekends.

With this formula we can calculate number of rides for one week for each time-segment.

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Calculating total monthly revenue:

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Total rides per week: 387 rides.

Total rides per month: 387*4=1,548 rides.

Total revenue per month: 1,548*$0.50=$774

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Calculating total monthy cost:

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Installment fee+permit fees+fuel costs=$30+$50+$100=$180.

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III. Solution

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Calculating monthly profit:

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Profit=Revenue-Cost.

$774-$180=$594.

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Further Questions

Would you consider the total profits as a realistic number?
- If yes, why?
- If no, why?

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Questions on this case

Question on the case: Bangkok motorbike

Definition of weekend

Bangkok motorbike

Most recent answer on Oct 19, 2020

The best answer (on Oct 19, 2020) is from:

gave the best answer on Oct 19, 2020

Hi there, This is a great lesson in reading/listening carefully! It's also a great lesson in clarifying questions. When the case says drivers can only participate in 1 rush hour, it specifically says morning OR ni ... (read entire answer)

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on Oct 19, 2020 on Oct 19, 2020
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Question on the case: Bangkok motorbike

Accounting for drivers that drive evening peak hours on Friday (weekday)

Bangkok motorbike

Anonymous A asked on Sep 14, 2023

I want to ask a question about accounting for total rides that each rider drives in this case. TLDR: Why are drivers assumed to only be taking morning peak hour rides when there's an imbalance between evening rush hour ... (read entire question)

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on Sep 14, 2023 on Sep 14, 2023
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