Uber Take Rate: KPI's to Balance Supply and Demand

How do you balance supply and demand? Is efficiency the key metric here that you need to focus on, in all cities?

Not really. Efficiency is, definitely, one of the metrics that we consider. But there are a set of several metrics that are very important for us to look at, to understand the supply and demand of that market. We’re looking at both supply-side metrics and demand-side metrics. On the demand side, we’re looking at surge, so how many trips are surging, as compared to requested trips. How many people are requesting and, out of those requests, how many trips are being completed. Those are mainly surge and complete to receive, on the demand side.

On the supply side, efficiency is definitely one of the metrics. ETAs, estimated time of arrival, was another metric. Those were a key set of four metrics that we will look at, in any of the markets, to understand whether it is a supply-constrained market or a demand-constrained market. For example, within a particular city, they have higher surge, lower C2R. Higher surge will indicate, yes, it’s a supply-constrained market, so that’s why you have a lot more demand and lower supply. If there is a higher C2R, it means that a lot of trips are being completed, which would mean that it is a demand-constrained market. Lower efficiency will indicate, if it’s a demand-constrained market, you can, potentially, increase the demand to increase the efficiency levels, or it’s an over-supplied market. The fourth one, as we talked about, if there are higher ETAs, it would mean that there is not enough supply. If there are lower ETAs, you have a lot of supply.

Based on those, we’ll think about what is the best action to take, for that particular market. We look at those four different metrics and, depending on higher or lower, for each of those metrics, we can come up with different strategies for that specific market.