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Social Sciences
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Is Uber a Threat to the Taxi Industry? (Essay Sample)


The essay analyzes the main features of Uber and its impact on the taxi industry.


Is Uber a Threat to the Taxi Industry?
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Is Uber a Threat to the Taxi Industry?
Uber's growth in public transport has shaped the way people commute. Uber's usage has spread to numerous nations across the globe since its launch in 2009. Uber is now used in more than 507 cities worldwide by linking drivers providing rides and travelers using a mobile application (Moon, 2015). The software offers a secure and reliable platform that allows users to book rides from any location. Uber is widely acclaimed to have favorably impacted the transportation sector (Qian et al., 2020). However, Uber has been heavily criticized for negatively impacting traditional taxi businesses (Cramer & Krueger, 2016). As an emerging innovation, Uber has taken a large chunk of the market share and is poised to dominate the taxi business. Although Uber's fast development has brought numerous advantages to the taxi sector, uncontrolled competition presents a significant danger to the traditional taxi business.
Drivers in the conventional taxi business must be licensed with their local government, purchase automobile insurance and pay annual taxes, as well as a yearly lease for taxi meters and transmitters (Angrist et al., 2021). As a result, being a licensed cab driver was both an expensive and lengthy exercise. The threat posed by Uber stems mainly from the notion that it has improved many mobility elements for both drivers and customers. Uber tax business requires little time and cost to start. Besides, Uber motorists can operate with no extra licensing charges from the government (Moon, 2015). Uber operators, unlike traditional taxis, do not have to pay for license coverage. As a result, many taxi drivers are joining the more profitable and user-friendly Uber taxi business.
Uber has helped the taxi business become more cost-effective. Uber trips are often less expensive than conventional taxi services. According to Qian et al. (2020), Uber trips are projected to be 2.5x cheaper compared to regular taxi fares. Because it offers quality rides at affordable costs, Uber has acquired considerable popularity and acceptance from customers. The main threat to the traditional taxi business is that Uber provides outstanding, convenient, and exquisite services, thus giving them an edge over its competitors (Rahel, 2016). Customers can book trips at any location, thus making transportation services more accessible. This flexibility has prompted more customers to abandon conventional taxis in favor of Uber.
On the contrary, Uber threatens to compromise the traditional taxi drivers' primary incomes. Conventional taxi rides had decreased from a 37 percent share in early 2014 to 14 in 2019 (Qian et al., 2020). Uber drivers operate fewer than 15 hours each week, thus making less money. Uber's operating model is unfair since it works on unbalanced grounds. The rapid dominance and growth of Uber put the survival of the taxicabs business in jeopardy (Cramer & Krueger, 2016). This factor opens the door for Uber to establish a monopoly in the foreseeable future. A monopolist business in the tax business has far-reaching consequences due to reduced competition. Enterprises that have too much authority tend to reap the maximum benefits of their position. With the authorities imposing few restrictions and encouraging Uber's dominance

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