Cab Drivers Revenue

Clarify question

• Which city is the driver in? New York
• Assumed he is an fairly active driver who works for 8 hours a day

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Estimate the numbers

• Fare per mile = 3.5$
• Avg miles per trip = 3
• Gas cost per mile = 0.2$
• Uber Commission = 30%
• Trips per day = 2 trips per hour * 8 hours = 16 trips per day

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Estimate with equation

• Per day revenue = Trips per day * avg miles per trip * (fare per mile * Excluding Uber commission - gas cost)
• Per day revenue = 163(3.5*0.7 - 0.2) = 108$ per day
• Per year = 52 weeks * 5 days per week * 108 = 28000$ per year

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State your assumptions

• Seasonality not factored, Surge not factored
• Wait time, base fare not included
• Commission assumed to be 30%

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Sense Check

• You know that average driver earns about 40-50k $ per year. Maybe we should factor in the base fare as the mileage is about 3 only and the commission to be 20%;
• Also let us factor wait time, Surge to be about 10% additional
• Base fare say 2.5$ initial charge ⇒ 525162.50.7 = 7280$
• Recalculate: at 20% commission, it works out to 125525 = 32500$ and with base fare also it is 32500 + 7280 = 39780$
• 10% for wait time, surge extra. Total = 1.1 * 39780 = 43750$

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