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My classmate Gaurika Sharma recently wrote a blog post on Uber’s potential entry into Vancouver’s taxi market, a topic that I am particularly interested in. Gaurika suggests a “there can only be one” possibility with the emergence of Uber’s services in Vancouver, and I tend to agree with her, not necessarily because I do not think Uber and taxis can co-exist, but more so because I do not think Uber should be allowed entrance into the taxi market.
Coincidentally, in my recent Economics tutorial I was given an article about Uber’s attempt to “revolutionise taxi markets,” and therefore have gained some insight into Uber’s business model. While Uber is known to provide slightly cheaper prices than a regular “street-hailed cab,” during periods of high demand, such as holidays, Uber spikes prices up to seven times normal fares- a clear depiction of price discrimination.
I have several relatives that work in the taxi industry, and from their perspective, if Uber were allowed into Vancouver, their numbers of customers would decrease substantially, and with most cab drivers earning a bulk of their profits during rush times such as holidays, there would be a conspicuous discrimination against these cab drivers as well with Uber make much more money for the same distance drives.
While I have a bias for the taxi industry and opinion that Uber should be kept out of Vancouver, I realize that Uber’s dynamic pricing could be a needed disturbance to the taxi industry from a microeconomics point of view. Ultimately, if taxi drivers want to keep Uber off their territory, they are going to need to ensure the government hears their opinions.