Problem
Case Study: Uber maintains a fleet of over 20,000 vehicles in 27 different metropolitan areas worldwide. Carsharing has become an increasingly popular way for urbanites to access a car when they need onewithout having to deal with the headaches ofparking, maintenance, and insurance/ registrationfees. Each individual Uber has a "home" parkingspot that it must be returned to after every use, andthese parking stations are broadly distributed so that no Uber member is ever too far from a car.Uber's fixed costs reside at the local level: for every new parking station they open, they need topay the upfront fixed cost to buy a car and rent aparking spot in that neighborhood. Uber members benefit from network effects, because as Uber expands there are more and more cities and campuses where uber members can access vehicles. However, Uber's fixed costs willexpand proportionally to the number of rentallocations that they offer. Uber can expand effectively, but its fixed costs are not easy to scale.
• Suggest to the management how to manage suchfixed costs together with the business?