Case Interview Question #00174: You have a friend who is a taxi cab operator (not the cab owner) in Chicago and he is asking for your help in assessing a situation: After dropping off customers at Chicago O’Hare International Airport (ORD), the taxi driver has 2 choices:
1. Stay at O’Hare and wait in the queue for 2 hours to take a customer back into the city.
2. Go directly back to the city and conduct business.
Your taxi driver friend wants to determine which one is the better option. What would you recommend and why?
Note to Interviewer: At this stage, ask the interviewee to brain storm how he/she would approach the problem. Seek a broad level understanding of the different issues that should be addressed. This case is meant to be very interactive and you need to ask the candidate very often for his/her thoughts. After a short brainstorming session and an introduction of the framework, the candidate should ask for the following facts specifically. If he/she does not think of one, help them reach it by asking questions that will lead to it.
Additional Information: (to be given to you if asked)
- Distance: The distance of the trip between O’Hare International Airport and Downtown Chicago is approximately 20 miles, and the trip is all highway
- Operation Revenues: $4 for the first mile, and $2 for every subsequent mile, tips = 15% of total meter.
- Operation Costs:
- Current gas price is $3/gallon, the cab’s gasoline consumption is 25 miles/gallon when driving on the highway and 20 miles/gallon in the city.
- 50% meter revenue goes to the cab owner.
- When waiting in the queue, assume no gas is consumed.
- The toll for a one-way trip is $3.