Taxi Drivers Do Not Need to Worry About Rival Taxi Services

There has been a lot of agitation among taxi drivers across the world against how the taxi business has been taken over by taxi services app like Uber and Lyft. This issue has been talked about across the globe in various countries, and has even caused traditional taxi drivers to go on strike against such taxi services. Traditional taxis have been a part of a city’s landscape. Whether, it is the yellow taxis of New York, black cabs of London or the black and yellow taxis of Mumbai, a drop has been witnessed in their business since such taxi services came into operation. Why People Love to Book a Taxi Through an App? The appeal of the taxi service apps is obvious – to hail a normal taxi, you need to wait for one to pass, then you might have to explain your destination, and finally hunt your wallet for the correct amount of change. • On cab driver app, you simply book a cab online • You get informed as it arrives • Your driver knows exactly where to drop you courtesy GPS • You can hop right out as soon as you reach your destination. You don’t have to worry about getting the taxi on time. You decide when you need a taxi, and one is available to you in minutes. However, the question remains that are such taxi services and the traditional taxis competitors, really? Is there hard evidence to prove that these taxi services are causing a decrease in the popularity of the traditional taxi, or is it just a decline because of a multiplicity of other factors? In short, are these two kinds of taxis substitutes or complements? The decline of the traditional taxi and its causes There is no denying that the traditional taxi is becoming less and less relevant. The average price of a medallion in New York used to be $1 million in 2014 during the summer and fell to $690,000 just over a year later. The loss during this period alone has been a staggering $4 billion in value. But there are also many other reasons for this – the introduction of City Bike sharing program being a prime example of such a cause. However, there is no particular hard fact that points to services like Uber being solely responsible for the decline of the taxi. This is because the consumer base of both the services is not common. A lot of people who would take an Uber or a Lyft would not take a taxi if they were not taking an Uber, but would rather walk it out or take the subway. This means that the customer base is not being poached by these taxi services, but instead a newer one is being carved out by them. The creation of a new consumer base In fact, this new consumer base may even help taxis out. These taxi driver app services are mostly being used as a substitute for personal automobile traveling. When there is a strong consumer base which is used to the convenience of hailing cabs instead of driving, a portion of these will also end up traveling in the traditional taxis. What needs to be understood is that the kind of services that these taxis and app driven taxi services provide might be the same,but upon examination, they have a very small circle of overlapping consumers. The taxi service companies might just end up helping traditional taxis out.