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Why some businesses win: competitive advantage and the economics of strategy

Why drivers go where the riders are, and what it costs to fight that

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The prompt

Illustrative numbers, fictional apps. In Singapore, drivers on the larger ride app, App B, carry a passenger for 45 minutes of each hour online. That is because riders are everywhere. Drivers on the smaller App A carry a passenger for only 30 minutes of each hour. On both apps a driver keeps SGD 0.80 for each minute with a passenger. How much more does a driver earn per hour on App B? And what would App A have to spend in bonuses to match it for 2,000 drivers working 40 hours a week?

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