How to Target Coupon Users

A ride-sharing company such as Lyft wants to launch a coupon campaign to increase commuter rides, but the coupon budget is limited. How would you analyze the user base to identify which users should receive the coupon?

In your answer, describe:

• How you would define the business goal, such as increasing incremental trips, revenue, or long-term rider retention.
• Which user segments you would consider, for example frequent commuters, lapsed riders, price-sensitive riders, new users, or users with high probability of converting without a coupon.
• What historical data you would use, such as trip frequency, commute-time usage, origin-destination patterns, fare levels, prior coupon usage, rider tenure, and retention.
• How you would distinguish users who are likely to respond because of the coupon from users who would have ridden anyway.
• What analytical or modeling approach you would use, such as exploratory segmentation, propensity modeling, or uplift modeling.
• How you would evaluate whether the targeting strategy works, including experiment design, success metrics, cannibalization risk, and return on investment.
• What trade-offs or risks you would watch for, such as selection bias, subsidy abuse, unfair targeting, or short-term lift that does not persist.

Assume the company can randomly assign coupons to some eligible users if needed for measurement.