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Taxi apps, regulation, and the market for taxi journeys


  • Harding, Simon
  • Kandlikar, Milind
  • Gulati, Sumeet


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.

Suggested Citation

  • Harding, Simon & Kandlikar, Milind & Gulati, Sumeet, 2016. "Taxi apps, regulation, and the market for taxi journeys," Transportation Research Part A: Policy and Practice, Elsevier, vol. 88(C), pages 15-25.
  • Handle: RePEc:eee:transa:v:88:y:2016:i:c:p:15-25 DOI: 10.1016/j.tra.2016.03.009

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    References listed on IDEAS

    1. Baldwin Hess, Daniel, 2009. "Access to Public Transit and Its Influence on Ridership for Older Adults in Two U.S. Cities," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 2(1), pages 3-27.
    2. repec:aph:ajpbhl:2002:92:8:1284-1289_4 is not listed on IDEAS
    3. Muramatsu, Naoko & Yin, Hongjun & Hedeker, Donald, 2010. "Functional declines, social support, and mental health in the elderly: Does living in a state supportive of home and community-based services make a difference?," Social Science & Medicine, Elsevier, vol. 70(7), pages 1050-1058, April.
    4. Antonio Paez & Darren Scott & Dimitris Potoglou & Pavlos Kanaroglou & K. Bruce Newbold, 2007. "Elderly Mobility: Demographic and Spatial Analysis of Trip Making in the Hamilton CMA, Canada," Urban Studies, Urban Studies Journal Limited, vol. 44(1), pages 123-146, January.
    5. Hess, Daniel Baldwin & Russell, Jessica Kozlowski, 2012. "Influence of built environment and transportation access on body mass index of older adults: Survey results from Erie County, New York," Transport Policy, Elsevier, vol. 20(C), pages 128-137.
    6. Jiyoung Park & Peter Gordon & James E. Moore Ii & Harry W. Richardson, 2008. "The State-by-State Economic Impacts of the 2002 Shutdown of the Los Angeles-Long Beach Ports," Growth and Change, Wiley Blackwell, vol. 39(4), pages 548-572.
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    1. repec:eee:transa:v:106:y:2017:i:c:p:1-11 is not listed on IDEAS
    2. repec:eee:transa:v:101:y:2017:i:c:p:11-21 is not listed on IDEAS
    3. repec:eee:rensus:v:80:y:2017:i:c:p:125-132 is not listed on IDEAS

    More about this item


    Taxi; Apps; Regulations; Uber; Credence; Thin market;


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