~/learn/Product Metrics · Trade-offs & launch decisions
Two-sided marketplace health
Supply, demand and liquidity — measuring products like Uber, Airbnb and DoorDash.
why this matters
Uber, Airbnb, DoorDash and Lyft build their interviews around two-sided trade-offs.
A marketplace has two sides that need each other: riders and drivers, guests and hosts, buyers and sellers. Growing one side without the other breaks the experience — too many riders means long waits; too many drivers means idle, unhappy drivers who leave.
Liquidity is the core health measure: how likely is a request to be matched quickly? For Uber that's the share of ride requests fulfilled and the wait time; for Airbnb, the share of searches that end in a booking; for eBay, the share of listings that sell.
Marketplace dashboard
demand side supply side requests available drivers conversion utilisation (busy time) wait time ← liquidity → earnings per hour balance both or one side leaves
Fulfilment rate = completed requests / total requests Driver utilisation = time with passenger / time online
Interview trap
A rider discount that raises demand can look great on rider metrics while wait times rise and driver earnings per hour fall. Always check both sides.
Pro tip
Measure at the local level. A marketplace is really thousands of local markets (a city at 6pm on a Friday); averages across a country hide shortages.
key takeaways
- Both sides must stay healthy.
- Liquidity = how often requests get matched.
- Measure locally, not just nationally.
check your understanding
A rider promo boosts ride requests 15%. Which metric best shows whether it hurt the marketplace?