Product design question
You have been assigned as the manager to design an incentive structure to the drivers of a cab aggregator. How would design it?
Practice this question out loud. An AI interviewer asks it, follows up like a real interviewer would, and scores your answer. Type or speak.
Start a mock interview on this question · Mock interview from a job description
What this question tests
Two-sided marketplace incentive design: can you balance driver earnings/retention against platform cost and rider-side supply reliability.
How to approach it
- Define the goal: incentivize enough driver supply during high-demand periods without overpaying during low-demand periods.
- Identify driver segments: full-time drivers who need predictable income versus part-time/gig drivers who respond to short-term incentives.
- Propose a structure: a base per-ride earnings floor plus dynamic surge-period bonuses, and quest/streak bonuses for completing a target number of rides in a window.
- Address fairness and manipulation risk: drivers gaming quests by cherry-picking short, high-value rides, so design metrics around completed hours or a mix of ride types, not just ride count.
- Balance platform cost: model incentive spend against the marginal value of additional supply during peak periods versus off-peak.
- Define success: driver retention rate, supply reliability during peak hours (reduced surge pricing frequency), and incentive cost per completed ride.
What a strong answer includes
- Segments drivers by full-time versus part-time needs, since a one-size incentive structure won't retain both groups well.
- Proposes a concrete structure (base plus surge bonus plus completion streaks) rather than a vague 'pay drivers more'.
- Explicitly addresses gaming risk, like cherry-picking short rides for quest completion, showing awareness of incentive-design pitfalls.
- Ties the design back to a business outcome, reduced surge frequency from reliable peak-hour supply, not just driver satisfaction alone.
Common mistakes
- Proposing incentives with no consideration of how drivers might game the metric used to trigger bonuses.
- Ignoring the cost side and proposing generous incentives with no model of platform economics.
Likely follow-up questions
- How would you prevent drivers from gaming a ride-count-based quest bonus?
- How would you adjust incentives differently across cities with very different demand patterns?
More product design questions
- How would you improve the Uber app?Lyft · Product design · Easy
- Design an app for making someone a better cook.Lyft · Product design · Medium
- How would you design at ETA system for Lyft drivers?Lyft · Product design · Medium
- Design Lyft for kids.Google · Product design · Hard
- How would you design a bicycle renting app for tourists?Google · Product design · Medium
- Design a referral system for a grocery app.Google · Product design · Medium
More questions from these companies
Learn the skill behind it
Chapters of the AI PM course that teach what this question tests.
- Chapter 4: Discovery and strategy for AI products
- Chapter 7: AI UX and human oversight: design for a system that is wrong sometimes
- Chapter 14: Get the job: the AI PM interview loop