Calculate Profitability and Break-Even for Lyft Partnership Campaign
Overview
This question evaluates a data scientist's competency in unit-economics analysis, break-even calculation, and revenue-versus-cost modeling for a credit card portfolio when considering a co-marketing investment.
Capital One
Aug 4, 2025, 10:55 AM
Data Scientist
HR Screen
Analytics & Experimentation
0
0
Credit Card Unit Economics and Lyft Co‑Marketing Break‑Even
Context
You are evaluating the current profitability of a credit card portfolio and considering a potential co‑marketing partnership with Lyft. Assume all figures below apply uniformly to active cardholders and there are no other costs unless specified.
Given
- Active cards: 500,000
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Per-card revenues and costs:
- Swipe (interchange) revenue: $2 per month
- Membership fee: $79 per year
- Interest revenue: $15 per month
- Fraud-prevention cost: $5 per month
- Proposed Lyft co‑marketing campaign cost: $25 million per year
Tasks
- Compute the current annual profit for the 500,000 active cards.
- Compute how many incremental active cardholders are required to at least break even on the $25 million Lyft campaign (assume new cardholders have the same unit economics as existing ones).
- Based on your calculations, would you recommend partnering with Lyft? State assumptions and key considerations in your reasoning.
Solution
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