Evaluate Financial Feasibility of Ride-Sharing Service

##### Scenario You manage a ride-sharing service and must analyze pricing, costs, capacity, and competitive strategy. ##### Question What key factors would you evaluate when assessing the financial feasibility of the ride-share business? 2. Given 2,400 rides per day at $30 each, drivers paid $700/day, a maximum of 5 rides per driver per hour over an 8-hour day, and a fixed daily cost of $10,000, calculate the daily profit. 3. How could you further increase profit, and what advantages can the app offer versus street-hailing taxis? Explain the role of supply-demand balance. 4. The day is split into 4 non-peak hours with 800 rides and 4 peak hours with 1,600 rides. Drivers work the full day. What peak-hour price per ride would make total daily profit equal to the profit computed in Question 2? 5. Provide additional recommendations to improve the business. ##### Hints Segment revenue, variable costs, fixed costs; derive number of drivers from capacity; set profit equations and solve for unknown price; discuss elasticity, surge pricing, and driver/passenger incentives.