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Calculate Profitability and Break-Even for Lyft Partnership Campaign

Capital OneData Scientist · HR Screen
EasyData ScientistHR ScreenAnalytics & Experimentation

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This interview question evaluates metric design, causal reasoning, experiment setup, diagnostics, SQL/statistical checks, and recommendations in a realistic interview setting. A strong answer for Calculate Profitability and Break-Even for Lyft Partnership Campaign states assumptions, handles edge cases, explains trade-offs, and shows how to validate the result clearly.

Scenario

Assess profitability of launching a new credit card and potential partnership campaign with Lyft.

Question

With 500,000 active cards, $2 monthly swipe revenue per card, a $79 annual membership fee, $15 monthly interest revenue per card, and a $5 monthly fraud-prevention cost per card, what is the annual profit? If we run a Lyft co-marketing campaign costing $25 million per year, how many incremental cardholders are required to at least break even on that campaign? Based on your calculations, would you recommend partnering with Lyft? Explain your reasoning.

Hints

Translate every figure to annual dollars, build a per-card contribution margin, compute break-even incremental volume, then weigh strategic pros/cons.