What metrics will you use to measure the success of Uber? [Uber PM Ques]

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Interviewer: What metrics will you use to measure the success of Uber?

Shailesh: I would like to ask some clarifying questions to understand the problem in a better way. When we are talking about the success of Uber, are we also taking into account other services like Uber eats, Uber connect or is it only for the Uber ride-hailing business?
Interviewer: We can focus on the ride-hailing business.

Shailesh: Let me first clarify my understanding of Uber’s ride-hailing business. Uber aims to provide reliable and convenient transportation to everyone around the world through its platform. Since it is a two-sided market place it has both driver and rider and Uber acts as a facilitator between the two.
Interviewer: That’s correct.

Shailesh: The way I would like to go about this is first we will discuss the broad goal of Uber. We will talk about its current stage of growth and who the major stakeholders are. Then we will discuss the actions that are necessary for stakeholders of Uber to help it align with its goals and we will define the metrics that represent those actions. Further, we will evaluate our metrics to check whether they are working or not and if there are some drawbacks to the defined metrics.
Interviewer: Perfect, go ahead.

GOAL/VISION:

Shailesh: Since Uber is in the rapid growth phase of the business lifecycle, its goal is to expand globally and bring its services to different cities. Its focus is to become the most preferred ride-sharing app in all the countries it operates and expand its market reach. In this phase, the major challenges they face are increasing market competition, expanding existing business and venturing into new markets.

Slowing Uber is paving its way towards becoming a super app. It started as a ride-hailing app. Then it moved to food delivery with Uber Eats business. It has also started grocery delivery in several cities through its partnership with Cornershop. Its next focus is to deliver convenience store items which it has already started in several regions. Further, it has also launched Uber Connect which is an on-demand package delivery service facilitating the transfer of packages, items or goods. The latest product launched by the company is Uber Explore which allows customers to browse and book experiences such as live events, fun activities or dinner reservations.

STAKEHOLDERS:

Uber follows a platform-business model. The two primary segments that Uber serves are drivers and customers. Customers request rides, drivers fulfil their demands, and Uber acts as an aggregator between the two.

Value proposition for customers:

• Convenient booking
• Live tracking and easy location sharing
• Online/offline mode of payments
• Multiple options — Uber Rentals, Uber Go, Uber XL etc.

Value proposition for drivers:

• Flexible working hours
• Low idle time
• Good source of income
• Transparency in payment

ACTION:

Drivers:

User journey of driver

• Accept more rides
• Reject/Cancel fewer rides
• Ensure better driver rating by improving service

Riders:

User journey of rider

• Book more rides through the Uber app.
• Cancel fewer rides
• Provide feedback and rating of the driver

These are prominent actions by riders and drivers.

METRICS:

Interviewer: Ok, so what metrics should we focus on?
Shailesh: There are a lot of metrics that a product manager can track. As we discussed Uber is in the growth and expansion phase, so we should focus on metrics that are related to activation and user retention.

We will define metrics that will capture the actions we discussed above. We will discuss the North star metric and 3–4 supporting metrics.

North star metric: One single metric that Uber needs to focus on to measure success. If the north star metric is improving, it means all the other metrics will fall in place.

North star metric for Uber: No of rides successfully completed per day

We will talk about the supporting metrics under the following subheadings–

1. Retention metrics: This information denotes the retention rate of the app. If the business is able to retain long-lasting connections with its customers they become loyal to the brand and help in word of mouth promotions.

• User stickiness: Ratio of daily active users to monthly active users. Here it makes more sense to use a period of 15 days instead of a month. This will allow us to track how likely users are to return to the platform.
• Daily Sessions Per Daily Active User: Ratio of no of daily sessions and the number of daily active users.

2. Business metrics: This information signifies the effectiveness of the business in getting customers to realize value from the service offered.

• Return on Investment: The average money spent by the business to convert every single user, this can also be thought of as the cost of conversion.
• Average Revenue Per User (ARPU): The amount of revenue an average user generates at a given point in time.

3. Performance metrics: This information denotes the health and technical performance of the app.

• No. of app crashes reported: App crash is the abrupt shutting down of an app which can lead to users churning from the application. The app should be free from crashes.
• Average App Store rating: This plays an important role in app growth as it serves as social proof to indicate the app’s quality of service. It is measured out of 5 and the higher the better.
• Average Load Time Per Session: This indicates the amount of time it takes for the application to become fully accessible to the user after they have started the session.

EVALUATION:

Shailesh: Now, let’s talk about some of the potential trade-offs which we might face with the metrics we just discussed.

• Daily sessions per daily active user might not give us a complete picture as even though a user might log in and try to book a ride he might not be able to successfully find a ride. Even after booking the ride, the driver might cancel the ride. So a high daily session might not be a positive indicator.

To understand the broad view, Uber needs to keep track of the No. of cancellations per day.

Interviewer: It was a great discussion. Thank you. 

-- Technomanagers