P
ProHub
English 简体中文 繁體中文
Medium Profitability

Take Inc.

#Technology
ProHub Comment

This case teaches candidates to build a profitability framework around revenue (price and quantity) and costs (fixed and variable), then use quantitative analysis on financial data to identify the root cause of declining profits. The case emphasizes second-order insights—recognizing that while revenue grew, costs grew at the same rate, keeping profit flat, and that new competition likely drove volume decline despite price increases.

Estimated Time 26 minutes
Difficulty Medium
Source Duke
10 / 100
Hyper is a mobile application that connects drivers with passengers. Launched successfully in 2010, it has been experiencing declining profitability for the last year. The COO of Take has requested your services to understand why.

Clarifying Information

  1. Client/Company information – Headquartered in California; Services all of North America
  2. Industry/Competition – One new entrant, Elevate, entered the market in 2013
  3. Product information – Mobile phone application for all operating systems that needs to be downloaded by passenger to link up with drivers in the neighborhood
  4. Value Chain – Pricing is based on a proprietary algorithm which looks at supply of drivers, demand of passengers and length of demanded trip; Drivers are not permanent employees of the Take, simply contractors
  5. Revenue – Ride fares and transaction fees
Mock Interview
Interviewer

Hyper is a mobile application that connects drivers with passengers. Launched successfully in 2010, it has been experiencing declining profitability for the last year. The COO of Take has requested your services to understand why.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
Practicing...
Score coming soon
Practice this case with AI Mock Interview

Take Inc., a rideshare platform, is experiencing declining profitability despite growing revenue. Candidates must analyze financial data to determine that flat profits result from constant cost growth offsetting slowing revenue growth, identify that new competitor Elevate and a price increase caused customer loss, and recommend a customer retention and acquisition strategy.

Key Insights:

  1. Profitability depends on both revenue growth rate and cost growth rate—when they move together, profit stagnates
  2. Price increases can drive volume declines, especially in competitive markets with new entrants
  3. Quantitative analysis of customer metrics (total customers declined 20% from 2014 to 2018) reveals the true problem behind financial decline
  4. Brainstorming solutions should address both customer retention (loyalty programs, partnerships) and acquisition (targeted marketing, referrals)
  5. Second-order risks of recommendations include competitor retaliation, price wars, and high customer acquisition costs with uncertain ROI