Profitability Analysis between Uber & Ola

Ola acquires 10000 users daily, and Uber acquired 20000 users daily. At the end of one year, which company would be more profitable?

Question:

Assume that Ola and Uber are two cab service aggregator companies that started on the same date in 2020.

Ola acquires 10000 users daily, and Uber acquired 20000 users daily.

At the end of one year, which company would be more profitable?

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Answer:

There are several factors to consider when determining which company would be more profitable at the end of one year. Profitability depends on multiple aspects, including user engagement, average revenue per user (ARPU), operational efficiency, and costs associated with acquiring and retaining users.

Let’s understand it in detail,

User Acquisition:

• Amazon: Acquires 10,000 users daily.

• Flipkart: Acquires 20,000 users daily.

Total Users at the End of One Year:

• Amazon: 10,000× 365 = 3,650,000 users

• Flipkart: 20,000 × 365 = 7,300,000 users.

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Assumptions: