A global review of taxi service markets and upcoming challenges

Abstract

Taxi services are of great importance to numerous population groups and a vital part of the urban transportation system. The three major taxi service markets are the street-hail, rank and dispatch markets, which are all subject to quantitative, qualitative, and price regulations. The justification for these regulations have been debated extensively, and a number of countries have experimented with deregulating all or parts of their taxi industries, with varying results. In recent years, taxi services have come under pressure from competition from advancements in technology and ride-hailing services that offer superior service quality at competitive prices, and utilise technologies that are gaining popularity with the public. Many previous studies have focused primarily on the benefits and costs of altering existing taxi regulations, and debating the ideal combination of policies to allow taxi markets to operate most efficiently and effectively. This research study has gone further to identify and explore other challenges, in addition to regulations, that will need to be analysed and addressed in the near future. Main challenges include increasing competition from ride-hailing services, taxi hailing mobile applications, premium taxi services, Universal Design taxis, and extent of regulatory policies in light of these developments. A questionnaire survey was conducted to gather more current views and opinions from stakeholders in the taxi industry. It was discovered that the regulation of the taxi industry is necessary to some extent, with quality and fare regulations more essential than quantity regulations. Further, the taxi industry should also learn to treat new competition as an opportunity to innovate and adapt to improve its own services rather than refusing to admit their flaws. Taxi services should aim to enhance their adoption of mobile applications for electronic hailing and electronic payment, promote overall service quality improvements through newer vehicles with in-vehicle amenities such as Wi-Fi and phone charging facilities, and give greater consideration to cater to elderly and disabled populations by providing wheelchair accessible services. Government regulating authorities must also swiftly but carefully address the lack of legislation for ride-hailing services. Legislation is gradually beginning to incorporate quality and safety standards, yet greater analysis is needed on how to optimally regulate the supply and fare structures of ride-hailing services. In the meantime, some regulation is better than no regulation, and some states in the United States have begun legally classifying, regulating and enforcing rules for ride-hailing companies. Finally, several considerations of areas that taxis services could be improved are given in hopes that taxi suppliers, regulating authorities and future researchers can ensure the competitiveness and success of the taxi industry is maintained.