The impacts of ridesourcing services on the taxi market: Empirical evidence from England and Wales

Abstract

Ridesourcing services have emerged as a major competitor and potential substitute for traditional taxi services. However, research investigating the effects of ridesourcing on the taxi market remains limited, with a focus on specific geographies. This empirical study aims to fill this research gap by examining the impacts of ridesourcing on the taxi market in England and Wales. Using biennial Taxi and Private Hire Vehicle (PHV) Statistics data from the Department for Transport spanning 2005 to 2019, we investigate the impacts of ridesourcing on the number of Hackney Carriages (HCs) and PHVs, as well as the employment patterns in the taxi sector. Our findings indicate a gradual decline in the number of HCs following the introduction of ridesourcing. In contrast, the number of PHVs, which are restricted to pre-bookings, gradually increased. However, we observed no statistically significant change in the number of taxi drivers on average. Notably, our analysis reveals heterogeneous effects across different areas, including rural, urban, and metropolitan districts. Furthermore, we explore the role of regulatory environments in the evolution of ridesourcing and traditional taxi services. Our study highlights that regulation change allowing PHVs to operate across borders may lead to a dramatic increase in the number of PHVs and taxi drivers in specific local authorities. Our research has important implications for policymakers and transportation authorities, particularly in terms of maintaining a competitive taxi market. Furthermore, our findings can inform authorities when planning environmentally sustainable mobility services through the implementation of appropriate regulatory frameworks.