Taxi Market Research Articles

Challenges and Reconstruction of Competition Policy in Taxi Market Resulting from APP

The majority of regulatory authorities in the world prohibit free access to taxi market and free bargaining for taxi fares between drivers and passengers. This kind of policy restricting competition results from the game between interests groups, but also matches with significant information asymmetry in taxi market. APP remodels information transmission and trade competition mechanisms in taxi market, overturns the legitimacy foundation of restricting competition policy, and makes taxi market policy pattern with global convergence fall apart. A triangle analytical framework, so called group games-institutional environment-economic thoughts, as the important means for studying the transition of competition policy, can be used to reveal the general reasons for the transition of market regulation policy between competition openness and competition ban, and indicates that taxi markets in different law domains will achieve competition liberalization asynchronously and converge constantly to regulation policy encouraging competition.

Southwest Airlines, MCI, and Now Uber: Lessons for Managing Competitive Entry into Taxi Markets

Notwithstanding low capital investment requirements and a market structure that otherwise allows many thousands of competitors in big markets, taxis have long been treated as a regulated industry, with the same legal constraints as once applied to railroads, airlines, telecoms, electric, and other utilities. Now, Uber and other ridesharing services are upsetting that regulatory system, much as the competitive entry of Southwest Airlines or MCI upset the premises of regulation in their markets. This paper discusses the economic reasons that taxi markets were regulated as common carriers, with limited entry, rate regulation, and universal service obligations. And this paper explains how ride-sharing services change the market structure without creating the fear of a persistent new monopoly. Drawing on prior deregulatory practice, the paper then provides a roadmap for managing the transformation of “ride markets”: separate safety from economic regulation; ensure competitive neutrality; make universal service subsidies explicit; manage externalities directly; and reject claims from incumbents that their lost value somehow requires compensation.

Uber Über regulation? Regulatory change following the emergence of new technologies in the taxi market

AbstractCan emerging technologies transform not only markets, but also foster new regulatory change mechanisms? In the context of prevailing theories of regulatory change, this article explores the extent to which an interest‐based explanation can account for the regulatory responses toward emerging Transportation Network Companies (TNCs). Based on a primary cross‐city analysis of the 40 largest cities in the United States, the study found that although the existence ofex anteinterest groups indeed somewhat limited the extent of ex post regulatory acceptance of TNCs, regulators seemed to prefer the newcomers over existing incumbents and approved TNCs in 77.5 percent of the examined cities, rarely pursuing harsh enforcement even when TNCs operated illegally. The research attempts to explain this intriguing phenomenon by extending the interest‐based approach to account for the key role played by “technological regulatory entrepreneurs.” The entrepreneurs bridged collective action barriers by becoming the central agent that managed, and reaped the benefits of, the collective action, by lowering the organizational costs and by disseminating information effectively and turning consumers into political campaigners, thus successfully promoting regulatory change.

Competition and vested interests in taxis in Ireland: A tale of two statutory instruments

This paper addresses, for the taxi market in Ireland, whether judicial, legislative and regulatory processes promote taxi users’ welfare or taxi license holders’ welfare. It is argued that the 2000 decision to remove quantitative restrictions on taxi numbers favoured taxi users; the 2010 decision to re impose such restrictions, with the exception of wheelchair accessible taxis, had the effect of favouring taxi license holders, while doing little to meet its declared object to increase the number of wheelchair accessible taxis and the ready availability of such vehicles for wheelchair customers. Whether the late 2010s/early 2020s will be a rerun of the late 1990s, with increasing waiting times for taxi users, is a moot point. An applicant refused a taxi license might, as in 2000, successfully bring a High Court case contesting the legal basis for the present quantitative restrictions. The Competition and Consumer Protection Commission might spark debate on taxi regulatory policy, while the Minister for Transport, Tourism and Sport might issue a policy direction to the National Transport Authority, the taxi regulator, requiring it to clarify the objectives and benchmarks for success of its existing prohibition on taxi licenses and to consider how best to create incentives for those with wheelchair accessible taxis to use them to service wheelchair users.

Taxi market equilibrium with third-party hailing service

With the development and deployment of new technologies, the oligopolistic taxi industry is transforming into a shared market with coexistence of both traditional taxi service (TTS) and app-based third-party taxi service (ATTS). The ATTS is different from TTS in both entry policy and fare setting, and brings competition into the market. To account for the revolution of the taxi industry, in this study, we analyze the characteristics of the TTS and ATTS, model the taxi market as a multiple-leader-follower game at the network level, and investigate the equilibrium of taxi market with competition (TMC Equilibrium). In particular, passengers are modeled as the leaders who seek to minimize their travel cost associated with taxi rides. Followers involve TTS and ATTS drivers, who compete for passengers to maximize their revenue. The network model captures selfish behavior of passengers and drivers in the taxi market, and we prove the existence of TMC Equilibrium for the proposed model using variational inequality formulations. An iterative algorithm is further developed to find the TMC Equilibrium, which corresponds to the strongly stationary point of the multi-leader-follower game. Based on numerical results, it is observed that fleet size and pricing policy are closely associated with the level of competition in the market and may have significant impact on total passengers cost, average waiting time, and fleet utilization.

Time-of-Day Pricing in Taxi Markets

For a regular weekday in New York City, the number of taxi trips at 8 P.M. may be 10 times greater than that at 5 A.M., while passengers are charged under the same pricing scheme. Motivated by temporally non-stationary demand and supply in the taxi market, the time-of-day (TOD) pricing scheme for taxi industry is framed to vary trip cost dynamically over time, so that total market revenue is maximized. Temporal market dynamics is modeled as a semi-Markov process, which captures leftover of drivers, spillover of passengers, and restoration of drivers in service along the time horizon. The TOD pricing scheme is therefore formulated as discrete time stochastic dynamic programming with the goal to find the optimal sequence of price multipliers. The approximate dynamic programming (ADP) approach is introduced to solve the curse of dimensionality. Numerical experiments are conducted using New York City taxi trip data to illustrate the effectiveness of TOD price in real-world taxi market. The results suggest that TOD price may increase daily market revenue by over 10% using the ADP approach. Our experiments also show that TOD price may be even more effective if sudden surges in demand take place in the market.

Optimal Fare, Vacancy Rate, and Subsidies under Log-Linear Demand with the Consideration of Externalities for a Cruising Taxi Market

Externality is an important issue for formulating the regulation policy of a taxi market. However, this issue is rarely taken into account in the current policy-making process, and it has not been adequately explored in prior research. This study extends the model proposed by Chang and Chu in 2009 with the aim of exploring the effect of externality on the optimization of the regulation policy of a cruising taxi market. A closed-form solution for optimizing the fare, vacancy rate, and subsidy of the market is derived. The results show that when the externality of taxi trips is taken into consideration, the optimal vacancy rate should be lower and the subsidy should be higher than they are under current conditions where externality is not considered. The results of the sensitivity analysis on the occupied and vacant distance indicate that the relation of the vacant distance to the marginal external cost is more sensitive than the occupied distance. The result of the sensitivity analysis on the subsidy shows the existence of a negative relationship between the marginal external cost and the optimal subsidy.

Game Theoretic Considerations for Optimizing Efficiency of Taxi Systems

Taxi service is an indispensable part of public transport in modern cities due to its unique end-to-end convenience, flexible timetable, and comfortable riding experience. To support these advantages, taxi systems adopt a decentralized operation mode where taxi drivers strategically decide their schedules and routes and compete with each other for individual profits regardless of the system level efficiency. Not surprisingly, taxi systems are therefore usually inefficient and difficult to optimize. While taxi drivers’ strategic behavior plays a central role here, they were unfortunately ignored in most existing research. To overcome the inadequacy, we proposed a game-theoretic approach to model taxi drivers’ behavior. We apply the model to optimizing the pricing scheme of taxi markets, and in particular to solving a long-standing issue known as the peak-time dilemma in Beijing's taxi market.

Empirical Analysis of Chinese Labor Supply Decisions from a Dynamic Perspective: Evidence from Hangzhou Cabdrivers

According to the life-cycle theory of labor supply, labor supply of workers responds positively to short-term wage volatility. However, many researches find the elasticity of foreign cabdrivers' labor supply to wages is negative. How about Chinese cabdrivers? This paper uses GPS trip information of Hangzhou cabs to investigate the endotaxy-based and extensionality-based labor supply of drivers. To address the endophytism problem caused by measurement error and peer effect, it uses the number of fares with long trips the drivers encounter that very day as the instrument variable for earnings per hour to analyze the influence of earnings per hour on drivers' labor supply. It argues that the elasticity of endotaxy-based and extensionality-based labor supply of Hangzhou cabdrivers to wages is significantly positive, showing that government policies such as the increase in oil subsidies are actually effective incentives to raise cabdrivers' labor supply. Meanwhile, it also implies that the release from the price regulation of taxi market can help drivers to optimize their work decisions better according to the market demands.

Cacophony of Contestation: Forms of Voice and the Warsaw Taxi Market as a Field of Struggles

AbstractThis article analyses the political struggles in and around the Warsaw taxi market. Drawing on Pierre Bourdieu’s theory of social fields and incorporating Albert Hirschman’s metaphor of political action as voice, I capture the position-taking of members of the taxi field, highlighting the different levels of involvement in the struggles. By distinguishing between different forms of voice—murmuring, jeering, whispering, hissing, grunting, and shouting—I show that the struggles that shape the Warsaw taxi market take the form of struggles over classifications and struggles over opportunities for exchange. I describe how market institutions are established and contested within the political field; enforced and contested within the bureaucratic field; and interpreted and contested within the juridical field. I thus contribute a field theory that investigates the links between fields and especially between economic fields and the state. This article draws on fieldwork conducted in Warsaw between November 2012 and June 2013.

The Taxi Service Review: Malaysia Context

In the majority city around the globe, taxis are an important element in mobility, which plays a significant role in transportation network. Surprisingly, this transportation mode carries no less than 40% passengers, more than all other major public transportation such as busses and trains (Adrian T. Moore, 2008). There is consideration made by some public transportation analyst saying that using taxi service usually cost more than other public transportation mode, therefore, taxis should offer something that other public transportation means do not have (Salanova, Estrada, Aifadopoulou, & Mitsakis, 2011). In circumstantial cases, taxi services are considered to be important towards certain articulation of the citizenry, such as the disabled, seniors, housewives, and the poor because they have much higher share of taxi trips than their percentage in the population (Moore & Balaker, 2006). Nowadays, the majority of the cities around the world have regulated their taxi services such as controlling taxi entry into the market and implementing a fixed fare (Shaw, Gilbert, Bishop, & Pruitt, 1983). Furthermore, in some major countries like UK’s and US, they also set the requirements for taxi drivers, types of vehicles, finances and controlling the operations. But prior to implementing regulated taxi services, there are lots of research conducted regarding the taxi market regulation which has been done by multi agencies and other public transportation experts (Moore & Balaker, 2006). This paper aim to review the Malaysian taxi services scenario. This paper also supported by the survey to see the congruity between the literature and outcome of the survey prior to the current situation of taxi services in Malaysia. DOI: 10.5901/mjss.2016.v7n4p559

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

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.

Pricing strategies for a taxi-hailing platform

Taxi hailing apps that facilitate taxi-customer matching quickly become popular in recent years. By combining the theories of two-sided market and taxi market, this paper models the taxi market in the presence of a single taxi hailing app through an aggregate and static approach. Based on the equilibrium model, the existence and stability of equilibria are examined, and a partial-derivative-based sensitivity analysis is conducted to quantitatively evaluate the impacts of the platform’s pricing strategies to the taxi market performance. The features of desirable price perturbations that improve social welfare and/or the platform’s profitability are also characterized.

Social optimal shifts and fares of taxi services

This paper presents a mathematical model for supporting the decision and policy making related to the optimal determination of shifts and fares of taxi services in a major city. The model is based on the system’s generalized cost function and uses continuous approximations and geometric probabilities for estimating the key performance indicators of the taxi market, which are waiting and access time for the customers (in-vehicle travel time does not depend on the offer side) and benefits for the drivers. The model is based on an econometric model with the inclusion of an elastic demand, which allows the estimation of the optimal values for the two decision variables of the problem: fare structure and the taxi fleet size. The model also accounts for a full-day time period instead of the one-hour time frame models used in most of the taxi models, which allows for providing insights on the daily duration and distribution of the shifts that should be defined by the policy makers.

Optimal Fleet Size and Fare Setting in Emerging Taxi Markets with Stochastic Demand

AbstractThe emerging taxi services, for instance, Uber and Lyft, are challenging traditional fully regulated taxi markets. Transportation agencies are spending significant efforts to understand the optimal pricing and fleet size taxis that are efficient for a given urban area. This study develops a modeling framework for studying a decentralized equilibrium based market study where the fare is strictly regulated by a taxi commission. The nature of demand‐supply equilibria with stochastic demand are discussed to determine optimal development strategies, for instance, number of issued licenses and fare setting. Two Stackelberg games are formulated to specify leader‐follower relationships between transportation authorities and and the followers — taxi drivers and passengers. An iterative approach is designed to simulate the games and solve corresponding mathematical optimization problems. The case study is based on New York City data which shows that the taxi market may be oversupplied and underpriced, which confirms findings from other studies and price hikes in 2012. Furthermore, different development strategies are proposed based on two Stackelberg games to respond to intended taxi system changes, such as price and quantity elasticity of taxi demand, levels of demand variance, average taxi operation speed, passengers' waiting time value, and taxi service coverage. The results have important implications in determining development strategies for taxi industry with emerging taxi services, stochastic demand, and the rapidly changing environment.

Taxi apps, regulation, and the market for taxi journeys

This paper attempts to provide a starting point for discussion on how smartphone-based taxi applications (‘apps’) have changed the market for taxi journeys and the resulting implications for taxi market regulation. The paper focuses on the taxi apps and their impact on taxi markets. It provides a brief history of taxi regulation before outlining the underlying economic rationales of its current form in many parts of the world, characterised as the “QQE” framework (quantity, quality and economic controls on operators). It argues that current regulation assumes that taxi markets are subject to three sets of problems that require correction by regulatory intervention, namely: those associated with credence goods, problems related to open access and those resulting from transactions occurring in a thin market. It is then proposed that taxi apps solve both the credence good and thin market problems whilst largely mitigating the problems associated with open access. The paper then presents some potential problems for taxi apps, namely the potential for instability on supply and demand sides, collusion and monopoly. It also discusses concerns about driver background checks and safety. The paper concludes by arguing that instead of restricting the growth of the taxi market, regulators should focus on reducing the likelihood of monopoly and collusion in a taxi market led by apps.

The Entrepreneurship Process in High Performing Hybrid Organizations: Insights from Diamond Cab

In the midst of the mainstream taxi business that is driven by profit-maximizing operators and taxi drivers, social innovators are breaking the established model by creating a specialty taxi market that serves a neglected market, i.e., the elderly, the disabled and wheelchair users, using an alternative compensation model and novel taxi design, as well as balancing social and business goals. This chapter summarizes a study of Diamond Cab, perhaps Hong Kong’s (China’s) first and most successful social enterprise, that has created a specialty taxi market from the ground up and quickly gained legitimacy in the new market. The study proposes several factors that explain the success of the social enterprise: a focused strategy, social design orientation, social bricolage, and informal and formal advice networks, as well as biographical variables including personal values, traits, and distress. It concludes with implications for theory, practice and policy making.

“Internet +” Epoch Social Management Innovation: Challenge and Response - To the Case of Shanghai Taxi Operations Management

Human society has entered the Internet age, the network plays a very important function in all aspects of social management. In recent years, operational management of the taxi industry once again become the focus of the society because of various taxi network software prevalence. Take Shanghai Taxi management model for example, Compare the comparison of traditional and the present stage management mode and measures taken by the government. Summary and analysis the deficiency of the taxi industry and the government management. On this basis, developed the taxi industry how to take the role of the market in public services, how governments use the Internet to integrate the taxi market and improve management and service levels.

Modeling taxi services with smartphone-based e-hailing applications

Traditionally, customers always hail empty-cruising taxis on streets, which may offer low levels of comfort and efficiency especially during rush hours or rainy days. Thanks to the advance of smartphone technology, the e-hailing applications, which enable customers to hail taxis through their smartphones, become popular globally. To provide a systematic account of the impact of e-hailing applications’ wide adoption on the taxi system, we first propose a spatial equilibrium model that not only balances the supply and demand of taxi services but also captures both the taxi drivers’ and customers’ possible adoption of the newly-emerging e-hailing applications in a well-regulated taxi market. We then prove the existence of the proposed equilibrium, and further provide an algorithm to solve it. An extensive equilibrium model with elastic taxi-customer demands is also proposed. Lastly, a numerical example is presented to compare the taxi services with and without the e-hailing application and evaluate two types of e-hailing applications.

Optimization and strategic behavior in a passenger–taxi service system

We study a passenger–taxi problem in this paper. The objective to maximize the social welfare and optimize the allocation of taxi market resources. We analyze the strategic behavior of passengers who decide whether to join the system or balk in both observable and unobservable cases. In observable case, we obtain the optimal selfish threshold that maximizes their individual revenues and give the conditions of the existence of the optimal selfless threshold that maximize the social welfare. In unobservable case, we discuss the equilibrium strategies for the selfish passengers and derive the optimal arrival rate for the socially concerned passengers. Further, we analyze how the government controls the number of taxis by subsidizing taxis or levying a tax on taxis.