CFA Level I · CFA Level I Exam · Business Models
An online platform connects independent drivers with riders and keeps a 20% commission on each fare, owning no vehicles. Compared with a traditional taxi company that owns its fleet, the platform's business model most likely has:
The platform most likely has lower fixed asset intensity and greater scalability. It owns no vehicles, so growth needs little capital, and each added driver and rider raises commission revenue at low incremental cost. A taxi company must buy cars to expand, making it more asset-heavy and less scalable.
- Ahigher fixed asset intensity and lower scalability
- Blower fixed asset intensity and greater scalabilityCorrect
- Cthe same asset intensity but lower customer reach
Explanation
A platform that owns no vehicles needs little capital in fixed assets, so it is asset-light. Adding drivers and riders raises revenue at low incremental cost, giving greater scalability. The taxi company must buy vehicles to grow, so the first option reverses the comparison.
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