The analysis of ratio of trips taken vs miles driven for hourly and daily users shows

that daily users are using vehicles for longer stretches (commuting between cities
perhaps) as compared to hourly users. Similarly, in terms of total hours used we can
see daily users data shows more hours as compared to hourly users. However,
when we see the respective billing pattern, it yields opposite in terms of revenue.
This seems to be underlying issue of the business model that Chase needs to
address. She should follow tiered pricing to reap maximum profit from the daily
users as well as the costs incurred do not vary for hourly and daily users.

(A) For daily trips, 94 miles used, instead of expected 125 miles, and 16 hours used
instead of expected 24 hours (it is assumed that billing for daily trips is fixed for 125
miles/24 hours thus saving 31 miles and 8 hours) (B) Hourly use is expected to be 4
hrs per trip however actual results show that 6.2 hrs per trip are used. As hourly
charge is variable, thus increased hours reflect increased earnings, while daily
charges are fixed, thus decreased miles reflect savings. Thus, business is in overall
positive direction.

Revenue hourly (per Hour) $ 6.90

Revenue daily (per hour) $ 2.84

Miles driven (hourly) % 32.69%
Miles driven (daily) % 67.31%
Trips taken (hourly) % 65.07%
Trips taken (daily) % 34.93%
Hours used (hourly) % 41.92%
Hours used (daily) % 58.08%
Revenue per trip (daily
basis) $ 45.45
Revenue per trip (hourly
basis) $ 42.78

From the above table, we can see that revenue per trip for daily users is higher than
revenue per trip for hourly basis and miles driven and hours used for daily users is
greater than hourly users we should go for increasing the price and decreasing the
amount of free oil to be provided.
But if we consider the other side no of trips taken for hourly users are higher i.e.
65%, which means revenue by hourly basis should be increased more as it is a
variable cost.