Taxicab Industry Research Articles

Nudges as norms: Evidence from the NYC taxi cab industry

This paper explores how default options influence tipping behavior where consumers can use a suggested default or manually enter a tip amount. To identify the impact suggested tip levels have on behavior, I take advantage of the variation of credit payment vendors within the New York City taxi industry. Using both timing of the payment screen installations and variation across taxis in the technology vendor, I find that a five percentage point increase in the default tip percentages results in decreased default selection and an increase in frequency of manual tips. Furthermore, I find that this increase is significantly greater for individuals who place relatively lower weight on their norm belief. This research demonstrates how the interaction of implicit social norms and cognitive costs together explain the ‘trade-off’ phenomenon within the default literature where following an increase in defaults, the propensity to leave a default contribution decreases while the average contribution increases. The results of this research provides a practical perspective for firms considering the implementation of default suggestions.

The stock market tips

We investigate the influence of public companies on their local economies through the spending of their employees on local goods and services. Using the taxicab industry in New York City as a laboratory, we find that tips paid for taxis taken near firms’ headquarters are higher on the days the firms’ stock returns are higher. This effect is short-lived, is stronger for firms offering greater stock-based compensation, and varies across industries. In addition, tipping increases gradually following the initial public offerings (IPOs) of firms, and this increase becomes significant at the end of the IPO lock-up period. Idiosyncratic stock returns are more strongly associated with tipping than are aggregate stock market or industry returns, suggesting that the increase in tipping with stock returns is due to firm-level factors. The number of taxis taken near firms’ headquarters, too, increases with their stock returns. Additional tests suggest that these findings are non-spurious.

Using a natural experiment in the taxicab industry to analyze the effects of third-party income reporting

This paper uses confidential tax returns data from sole proprietor businesses to estimate behavioral responses to the introduction of Form 1099-K, a third-party income reporting law that requires credit and debit card companies to report to the Internal Revenue Service gross of payment transactions that businesses receive through their payment systems. We estimate the causal impact of Form 1099-K on business reporting by exploiting a natural experiment in which some cities in the U.S. passed ordinances requiring taxicabs to install credit card readers in their vehicles, while other cities did not pass such ordinances, creating plausibly exogenous variation in the share of receipts reported on Form 1099-K. We find that taxpayers respond to third-party information reporting in offsetting ways. In particular, we find that businesses from cities with mandatory credit card in taxicab ordinances reported more receipts after the introduction of Form 1099-K compared to similar businesses from cities without mandatory credit card in taxicab ordinances, but they also reported an increase in expenses of similar magnitude. On net, third-party information reporting led to small and statistically insignificant changes in taxable income, profit, and tax liability. These results are robust to a variety of alternative specifications and placebo tests.

The Stock Market Tips

We investigate the influence of public companies on their local economies through the spending of their employees on local goods and services. Using the taxicab industry in New York City as a laboratory, we find that tips paid for taxis taken near firms’ headquarters are higher on the days their stock returns are higher. This finding is stronger for firms offering greater stock-based compensation, and tipping also increases following the initial public offerings (IPOs) of firms particularly at the end of the IPO lock-up period. Idiosyncratic stock returns are more strongly associated with tipping than are aggregate stock market returns, suggesting that the increase in tipping with stock returns is due to firm-level factors. The number of taxis taken near firms’ headquarters, too, increases with their stock returns. Additional tests suggest that these findings are non-spurious.

"Always on the go": A qualitative study of the perceptions of cardiovascular disease risk among Latino cab drivers.

The taxicab industry is a burgeoning occupation that predominantly employs immigrant males from low socioeconomic backgrounds. Factors such as sedentary nature, environmental factors, high stress coupled with socioeconomic factors may increase cardiovascular disease risk among taxicab drivers. Latinos, a growing immigrant population make up approximately 20% of this industry. However, few studies focus on their experiences as cab drivers or on the factors that may increase their cardiovascular risks. This was an ethnographic qualitative study. Data was collected via individual interviews combined with Go-Alongs. The Go-Along is an observational qualitative method whereby researchers accompany participants during routine activities and make observations. Interviews and observations were transcribed and coded to identify emerging themes. Thirty-two Latino male cab drivers participated; their mean age was 45 + 12 years; 47% did not finish high school; and 63% earned $30 000 or less. Time and stress emerged as dominant themes. Time constraints posed a barrier to healthy eating and physical activity. Drivers reported stress from constantly worrying about their finances and personal safety. Drivers also described stress from the physical toll of driving on the body. Go-Alongs supported these themes and identified social interactions and environmental factors that could be leveraged for health promotion. This study provided an opportunity for cab drivers to describe their perspectives on reasons why their occupation was associated with a high risk for cardiovascular disease. The Go-Alongs contributed to the understanding of the social and environmental context that characterized cardiovascular risks in this occupation.

Taxis for neoliberalism! Surveillance and resistance in post-industrial Philadelphia

As a consequence of neoliberalism, employment has become increasingly precarious and informal, sitting outside of traditional organizational contexts. There is a need to better understand how these structures emerge and, importantly, how workers can also adapt to challenge these shifts. This article is a study of a labour dispute between Philadelphia taxicab drivers and the governmental regulatory body. The dispute was centred around the implementation of surveillance technologies to regulate and control the industry and the drivers’ working practices which they considered to be de-professionalizing and an infringement of their liberty. The drivers resisted through traditional organizing, legal challenges and creating unconventional alliances. We argue that this labour dispute should be seen in the wider context of how a neoliberal political economy emerges and is maintained – in this case not by capital, but by the state. The article is a longitudinal case study covering the period from 2004 to 2011. As such, it is a prologue to later technologically driven transformations in the taxicab industry (such as ride-hailing apps) that have further exacerbated precarity among the workforce.

The effects of ride-hailing companies on the taxicab industry in Las Vegas, Nevada

Ride-hailing, or ride-sourcing, companies continue to penetrate the growing market of transportation-for-hire services in major metropolitan cities all across the globe, both revolutionizing travel and redefining the concept of the taxicab experience. Since the fall of 2015, Las Vegas, Nevada, was added to the ever-growing list of metropolises with such ride-hailing companies (RHCs). For cities whose economies are built predominately on the foundations of tourism, questions inevitably have been raised regarding the effects that RHCs have on their respective transportation system operators, in particular, the taxicab industry. In Las Vegas, services such as Uber (Uber Technologies Inc.) and Lyft (Lyft.com) compete directly with the taxicab industry for riders within the resort corridor and across the valley. In this study, a multinomial linear regression analysis used a multi-modal, time-series travel dataset to estimate the effects of RHCs on taxicab ridership. After controlling for a number of explanatory variables, including the total number of monthly visitors, transit ridership, ride-hailing trip counts to/from the airport and several other socioeconomic indicators, the results showed that RHCs do in fact have a negative, and significant, effect on taxicab ridership. A perhaps more profound and counterintuitive finding however was that transit ridership along the resort corridor actually complements (rather than competes with) taxi ridership; this could have significant implications moving forward.

Regulation of taxis and the rise of ridesharing

This paper examines the experience with economic regulation of traditional taxicab markets and the effects of newly emerging dynamic rideshare services on the taxicab industry. The paper provides a brief history of the regulation of taxicabs and the development of ridesharing services in cities world-wide. The aim is to show the pros and cons of taxicab regulation and explain why ridesharing services have gained a strong foothold in many markets. Even though economic regulation of taxicab markets has long been questioned, and some cities deregulated their taxi services over the past several decades, most cities have continued to regulate market entry and fares, citing environmental concerns and consumer protection as justifications. The recent development of dynamic ridesharing services, which match drivers with riders using cell phone technology to handle matches and payments, is posing a major challenge to the traditional taxi markets. While some cities have chosen to ban the new services, many others have allowed the rideshare services to compete with taxis, but with far fewer regulatory constraints. This in turn has led to new policy issues: not only whether taxis and ridesharing services should be regulated differently, but more broadly, what regulations are appropriate given the new technologies that are being employed by both traditional taxis and the new services.

Legislating Transportation Network Companies

The rapid expansion of transportation network companies (TNCs), such as Uber and Lyft, has led policy makers across the country to consider legislation to legalize and regulate TNC operations. In 2012, TNCs introduced a new travel option that used digital technology to provide an on-demand and highly automated private ride service, which has received support from consumers and investors. The emergence of TNCs has generated uncertainty about the legal status of TNC services, criticism from the taxicab industry, and concerns about public safety. In almost every U.S. state, policy makers have considered TNC legislation to address these issues, but there is no comprehensive source of information on the content of these policies. In this study, researchers systematically compiled a database of state TNC legislation and evaluated a set of policy issues addressed in the legislation. Thirty-four states and Washington, D.C., enacted legislation to authorize TNC operations through May 2016. These laws addressed policy areas including permits and fees, insurance and financial responsibility, driver and vehicle requirements, operational requirements, passenger protections, data reporting, and regulatory and rulemaking authority. This database can help policy makers navigate the evolving policy considerations presented by the rising popularity—and accompanying controversy—of TNCs. Key policy questions that emerged from this review of state TNC legislation include whether to regulate TNCs; if so, at what level of government; how to harmonize TNC policies with existing taxi and transportation policies; and how to address public safety without suppressing market competition.

Online Cruising Mile Reduction in Large-Scale Taxicab Networks

In the taxicab industry, a long-standing challenge is how to reduce taxicabs' miles spent without fares, i.e., cruising miles. The current solutions for this challenge usually depend on passengers to actively provide their locations in advance for pickups. To address this challenge without the burden on passengers, in this paper, we propose a cruising system, pCruise, for taxicab drivers to find efficient routes to pick up passengers to reduce cruising miles. According to the real-time pick-up events from nearby taxicabs, pCruise characterizes a cruising process with a cruising graph, and assigns weights on edges of the cruising graph to indicate the utility of cruising corresponding road segments. Our weighting process considers the number of nearby passengers and taxicabs together in real-time, aiming at two scenarios where taxicabs are explicitly or implicitly coordinated with each other. Based on a weighted cruising graph, when a taxicab becomes vacant, pCruise provides a distributed online scheduling strategy to obtain and update an efficient cruising route with the minimum length and at least one arriving passenger. We evaluate pCruise based on a real-world GPS dataset from a Chinese city Shenzhen with 14;000 taxicabs. The evaluation results show that pCruise assists taxicab drivers to reduce cruising miles by 42 percent on average.

Ich liebe Dich UBER alles in der Welt (I love you more than anything else in the world) [Leading Edge

Examines how companies like Uber disrupt the business model of an established industry (here the taxi cab industry) and assesses its impact on society as well as competition in the marketplace.

Financial institutions and the taxi-cab industry: an exploratory study in Canada

A current challenge taxi-cab owner/operators face in Canada is the lack of financing for taxi-cabs. This article examines business opportunities and lending risk; it also provides risk management strategies for financial institutions to manage the risk of lending to the taxi-cab industry. Members of the boards of directors and shareholders from the Canadian taxi-cab industry,

Possibilities for and limits to enforcing tax compliance measures on ‘irregular’ workers

This article is a contribution to ongoing studies of tax compliance by Australian taxi-cab operators and their drivers. The limits of the dominant academic literature and the industry-specific legislation on tax conformity will be assessed. The article’s core premise is that social and economic activities (legal and illicit) of cab drivers are embedded within unique networks of social relations. Cab drivers are subjected to a multitude of structural arrangements and informal social control mechanisms, which influence their attitudes and actions with regard to tax compliance. Regulatory initiatives towards diminishing non-compliance in the Australian taxi-cab industry continue to ignore the concept of mixed embeddedness and the interrelatedness between compliance rules, enforcement practices and broader legislative framework. It will be argued that changes to the employment status of Australian taxi drivers can produce a more expedient way for curtailing the deeply entrenched tax non-compliant modus operandi within this particular sector of Australia’s transport-services industry.

An Evaluation of the Establishment of a Taxi Flat Rate from City to Airport

This paper explores the establishment of a flat rate for the taxicab service that serves routes between the city and the airport in Seville. First, the advantages and disadvantages of a flat rate are explained and why it may be an advisable measure for tourist cities with a conflictive taxicab industry. In addition, by using a methodology based on the estimation of average treatment effects, an evaluation is made of the impact of the taxi flat rate on the probability of passengers choosing a taxi for their city–airport transport needs. The main conclusion is that the increased market transparency fostered by this urban transport policy has led to an increase of almost 7 per cent in both the probability of selection and the average revenues of taxi-drivers.

Diversification, Diseconomies of Scope, and Vertical Contracting: Evidence from the Taxicab Industry

This paper studies how firms reorganize following diversification, proposing that firms use outsourcing, or vertical disintegration, to manage diseconomies of scope. We also consider the origins of scope diseconomies, showing how different underlying mechanisms generate contrasting predictions about the link between within-firm task heterogeneity and the incentive to outsource following diversification. We test these propositions using microdata on taxicab and limousine fleets from the Economic Census. The results show that taxicab firms outsource, by shifting the composition of their fleets toward owner-operator drivers, when they diversify into the limousine business. The magnitude of the shift toward driver ownership is larger in less urban markets, where the tasks performed by taxicab and limousine drivers are more similar. These findings suggest that (1) firms use outsourcing to manage diseconomies of scope at a particular point in the value chain and (2) interagent conflicts can be an important source of scope diseconomies.

An international taxi cab evaluation: Comparing Madrid with London, New York, and Paris

AbstractTaxi cabs are a key feature of daily life in Madrid, which is one of the most important European cities. An exploratory study was undertaken in order to evaluate the quality of Madrid's taxi cab industry.This paper analyses the current situation by using the Taxi Cab Management Model (TCMM) which identifies the key processes for managing and operating a taxi cab service in any international city. The model provides a benchmark for measuring performance against other capital cities in developed nations. By comparing the results of this analysis with similar case studies of London, New York and Paris, areas of best practice are identified, as well as possible operational improvements.The study concludes that the Madrid taxi cab industry is ahead of cities like London, New York and Paris in terms of IT integration within the industry, but that some key issues need to be reviewed e.g. the potential for a more centralised fleet management system. One of the best features of the Madrid taxi cab industry was found to be the test for candidate drivers. It is well designed in terms of its user interface (candidates do not need to be computer literate), it has a large bank of questions (up to 6000) that are used randomly to generate examinations, and it offers a highly efficient way to assess candidates. Copyright © 2010 John Wiley & Sons, Ltd.

Workplace Violence and Stress: The Case of Taxi Drivers

Abstract As important as the taxi cab industry is to urban transportation systems, the homicide rate among U.S. occupations, measured per hundred thousand workers, is the highest for taxi drivers. Taxi drivers face the likelihood of workplace homicide at four times the rate for police and other law enforcement jobs, which are generally perceived as having high workplace risk. The high rate of workplace violence and stress may reflect asymmetric market conditions. These conditions may reflect power that is the systematic exploitation of the weak (referred to by the roving bandit metaphor in the public choice literature), the presence of asymmetric information between the driver and the passenger, and differing social norms. As such, these asymmetric market conditions offer alternative explanations for the high incidence of violent crimes and stress from possible threats, assaults, and robbery present for taxi drivers. This study reports findings from a survey of 401 taxi drivers in Las Vegas, Nevada, a city for which local transportation services are a relatively large contributor to the local economy, which is heavily dependent on tourism. We describe the patterns of drivers' experiences with occupational violence in terms of abuse, physical assault, robbery, fare evasion, and false allegations. Findings show marked differences between logit equations for native-born and foreign-born drivers (supporting the presence of asymmetry in social norms), statistical significance for a number of information symmetry measures for nativeborn drivers (reflecting correlation with the occurrence of violence), and limited significance for asymmetric measures of power.

Workplace Violence and Stress: The Case of Taxi Drivers

Abstract As important as the taxi cab industry is to urban transportation systems, the homicide rate among U.S. occupations, measured per hundred thousand workers, is the highest for taxi drivers. Taxi drivers face the likelihood of workplace homicide at four times the rate for police and other law enforcement jobs, which are generally perceived as having high workplace risk. The high rate of workplace violence and stress may reflect asymmetric market conditions. These conditions may reflect power that is the systematic exploitation of the weak (referred to by the roving bandit metaphor in the public choice literature), the presence of asymmetric information between the driver and the passenger, and differing social norms. As such, these asymmetric market conditions offer alternative explanations for the high incidence of violent crimes and stress from possible threats, assaults, and robbery present for taxi drivers. This study reports findings from a survey of 401 taxi drivers in Las Vegas, Nevada, a city for which local transportation services are a relatively large contributor to the local economy, which is heavily dependent on tourism. We describe the patterns of drivers' experiences with occupational violence in terms of abuse, physical assault, robbery, fare evasion, and false allegations. Findings show marked differences between logit equations for native-born and foreign-born drivers (supporting the presence of asymmetry in social norms), statistical significance for a number of information symmetry measures for nativeborn drivers (reflecting correlation with the occurrence of violence), and limited significance for asymmetric measures of power.

Diversification, Vertical Contracting and Diseconomies of Scope: Evidence from the Taxicab Industry

This paper studies how firms reorganize following diversification. We propose that firms use outsourcing, or vertical dis-integration, to reduce scope-induced governance costs that arise following diversification. We also consider the source of scope diseconomies, and argue that different underlying mechanisms generate contrasting predictions about the link between within- firm task heterogeneity and the incentive to outsource following diversification. We test these propositions using micro-data on taxicab and limousine fleets from the Economic Census. The results show that taxicab fleets outsource, by shifting towards owner-operator drivers, when they diversify into the limousine business. Moreover, the magnitude of this shift toward driver ownership is larger in less urban markets, where the tasks of taxicab and limousine drivers are similar, but compensation systems differ. The findings suggest that: (1) firms use outsourcing to manage diseconomies of scope; and (2) that inter-divisional conflicts are an important source of scope diseconomies in related diversification.

“Revenge” and “Rescue”: Workplace Deviance in the Taxicab Industry*

This study explores taxicab drivers’ acts of “revenge” and “rescue,” some of which are expressive acts, while others are more instrumental. This article builds on earlier theories of workplace deviance, demonstrating how deviance can serve different purposes and expanding the concept of “deviance admiration” (Heckert and Heckert 2004). It examines deviance in a circumstance—the taxicab industry—which introduces a tension between mandated conformity and necessary deviance: employees must conform to the employers’ rules and yet, to accomplish their jobs well, they need to abandon those rules occasionally. In addition to its theoretical contributions, this work has important practical applications for managers.