How can Glovo balance user affordability with fair compensation for delivery partners?

Introduction

Balancing user affordability with fair compensation for delivery partners is a critical trade-off for Glovo's business model. This scenario involves managing the delicate ecosystem of a three-sided marketplace, where we must consider the needs of customers, delivery partners, and the platform itself. I'll analyze this trade-off by examining the key stakeholders, metrics, and potential experiments to guide our decision-making process.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about the current market conditions for food delivery. Could you provide some insight into the competitive landscape and any recent changes in user behavior or expectations?

Why it matters: Helps understand external pressures and user demands Expected answer: Increased competition, users more price-sensitive Impact on approach: May need to focus more on differentiation or cost-cutting

• Business Context: Based on Glovo's business model, I assume we operate on a commission-based structure. Can you confirm our current revenue model and any strategic priorities we're focusing on?

Why it matters: Aligns solution with business objectives Expected answer: Commission-based model, focus on market expansion Impact on approach: May need to balance short-term profitability with long-term growth

• User Impact: I'm curious about our user segments. Can you share which user groups are most price-sensitive and how that affects their ordering frequency?

Why it matters: Identifies key user segments to consider Expected answer: Young adults and students are most price-sensitive Impact on approach: May need to develop targeted solutions for different segments

• Technical: Considering potential solutions, are there any technical limitations or ongoing projects that might affect our ability to implement dynamic pricing or payment systems?

Why it matters: Ensures feasibility of potential solutions Expected answer: Current system can handle basic dynamic pricing Impact on approach: May limit complexity of pricing algorithms or partner payment structures

• Resource: In terms of our team capacity, do we have dedicated resources for this project, or would it be competing with other initiatives?

Why it matters: Determines scope and timeline of potential solutions Expected answer: Limited resources available, competing priorities Impact on approach: May need to focus on high-impact, low-resource solutions