How many black cabs are there in London?

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How many black cabs are in London?


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There are typically two ways to answer sizing questions such as these – Demand side and Supply side. Our previous questions were predominantly sized using a demand side analysis.


When it comes to sizing this question using demand side there are several data points such as # of cars, what % of us use black cabs during the day and multiple demographics inputs among many others which will at the end see us throwing a lot of spaghetti on the wall without any guarantee of any sticking. So, the best route to take for this one is supply side.


We first need to estimate the number of cars on road in London (supply of cars) – after which we will take a % of these cars being cabs or black cabs to get to an approximate answer. Let’s start with approximating the number of people with driving license in London.


The number of people with driving license.


Let’s drive off first with estimating the population of London. Knowledgeable candidates will know that London houses around 9m people.


Not everyone can drive a car, so let’s break the population down by age groups.

People, who can drive are typically in the 19-72 years bracket.


Assuming the average Londoner lives up to the age of 80, we get 66% of total population eligible to drive a car or ~6m people.


Not every Londoner can afford a driving license, so let’s strike out 20% to get 4.8m people who have a driving license in London.


The number of the cars in London


Not everyone with a driving License owns a car. Assuming that only 50% of total license holders actually own a car, we get 2.4m car owners in London.


Now, some of the owners will have more than 1 car. Let’s assume that 15% of owners have 2 cars on an average, we get a total car population of 2.9m cars in London.


We have done some due diligence (Not that you will be able to do this during the interview – if you are lucky the interviewer will second your estimate) and found that there are 2.6 million cars in London (Link below). So, we are pretty close. Bravo!

http://content.tfl.gov.uk/technical-note-12-how-many-cars-are-there-in-london.pdf


The number of black cabs


Now we know that total cars which are cabs has to be a small % of total cars.


Assuming 5% of total cars are cabs. From first-hand experience you may estimate more that 5% but remember private cars are not always out and about versus a cab which is.


So, we get total number of cabs in London as 143k. We have plenty of Ubers and private taxis on the road – no points for getting that right in the interview.


So, assuming that 15% of all cabs are black cabs, we get 21,500 black cabs in London.

We put together a table explaining the above, below.


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