A Study on Users' Perception, Choice and Evaluation in the Taxi Market under Excessive Competition

Abstract

The current taxi market in the metropolises is composed mostly by small -scale taxi companies. In this situation, it is difficult for customers to perceive the difference in service level across taxi companies due to the lack of information. This study aims at evaluating the impact of market deregulation on the freedom of users' choice in the taxi market. A questionnaire survey is conducted to understand users' perception and preference for taxi services and a choice model under risk and information cost is applied to evaluate the inefficiency of current taxi market and also to suggest an optimal number of operators in the market. It is clarified that the number of taxi companies identified by users is at most 3 to 5 and therefore, an increase in variety does not always cause an increase in users' freedom of choice and their satisfaction.