Uber vs licensed taxi drivers: A war between technological standards

Sharing economy firms, based on online platforms, have become strong competitors of traditional firms in many services sector, including the taxi industry. The aim of this article is to provide an economic framework for the analysis of this rivalry. Besides the literature on sharing economy, the characteristics of online platforms are summarised, which explain the quick expanse of successful sharing economy ventures. Based on the theoretical literature it is shown that for service providers, the choice between sharing economy platforms and traditional firms resembles the " standard wars " , the competition between technological standards. A coordination game is presented to analyse the competition between taxi companies and Uber. The model not only reveals the different equilibria and the possible strategies of the players, but also shows the importance for adequate regulatory policy. p. 2-3 - The exact number of Uber drivers is ´ unknown: according to the company, more than 40 000 drivers applied to become a partner (UOKIK, 2016). In comparison, the overall number of taxi licences was 61300 at the end of 2014, out of which 2 10500 were issued in Warsaw (UOKIK, 2016). The number of taxi licenses in Warsaw has been increasing since then, reaching more than 11000 at the end of 2015 (City of Warsaw, 2016). This shows that not only the overall number of drivers increased, but also of traditional licensed drivers

Gyodi, K. (2017), Uber vs licensed taxi drivers: A war between technological standards, Working paper No. 2, DELab University of Warsaw.

Metadata

  • Research publication
  • Poland
  • Yes
  • transport
  • On-location platform-determined routine work, On-location client-determined moderately skilled work
  • Uber
  • Sector aspects, competition, lobbying
  • English
  • University of Warsaw (Research institute)
  • Qualitative research
  • 2017
  • Open access
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