Taxis and crowd-taxis: sharing as a private activity and public concern

Merethe Dotterud Leiren,Jørgen Aarhaug

doi:10.14763/2016.2.420

Abstract

The sharing economy has generated interest among economists for its customer focus and potential to enhance competition. However, it has also caused uproar in industries which have felt competitive pressure, for example among the established stakeholders in the taxi industry. While regulations currently impose considerable costs on the taxi industry, they do not cover virtual transport innovations such as Uber. The lack of a level playing field between taxis and such 'crowd-taxis' has generated media attention and conflict. Taxi owners worry about decreasing revenues and taxi drivers about poor working conditions. Other concerns are related to poor transport preparedness, accessibility issues, quality assurance and tax evasion. Despite considerable media attention, there has so far been a lack of scholarly literature addressing the consequences of the sharing economy in the transport sector. Focusing on the Norwegian taxi market, we argue that crowd-taxis will likely produce a range of unanticipated effects, necessitating regulation. For example, crowd-taxis may contribute to a loss of transport preparedness in rural areas. The findings are based on first and secondary data and 19 interviews.

Highlights

The sharing economy is rapidly affecting different transport markets
We ask the question: what are the effects of these new transport innovations on traditional taxi services?
The evidence suggests that sharing economy innovations affect the taxi market and society in different ways

Summary

INTRODUCTION

The sharing economy is rapidly affecting different transport markets. One such sector is the taxi industry, where strict regulations impose high costs on the operators and favour the operators that are already in the market. This raises the question of the level and the objective regulation should address: whether the cloud efficiencies and pricing algorithms introduced by Uber may overcome the challenges created by the difference between profitability for the taxi driver and society's demand for distribution of service in time and space (see Aarhaug and Skollerud, 2016) Another distinction is related to the status of the professional versus the non-professional. The Norwegian Competition Authority (2015) is optimistic about the consumer benefits and has suggested to deregulate the taxi market, removing the taxi permit and price regulation and allow for services such as Uber. It should be easy to pay taxes’ (in Tobiassen, 2015)

Findings

DISCUSSION

CONCLUSION