Sources for use with Section B

Competition in the taxi market

Figure 1 – Private hire vehicles (PHV) and black cab taxis in London

[Source: https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing/licensing-information]

Note: Black cabs pick up customers from the roadside whereas private hire vehicles can
only pick up customers who have pre-booked. Private hire vehicle licenses are required by
Uber drivers.

Extract A – All change in the taxi market

For decades the roads in New York and London have been filled with yellow cabs and black
cabs offering a taxi service to passengers to transport them from A to B. These iconic
vehicles have been a regular sight on the congested streets of both cities. The arrival of app-
based taxi-service providers such as Uber, Lyft, Didi and Grab is challenging the monopoly
position held by yellow cabs in New York and black cabs in London and in other major cities
across the world.

Extract B – App-based taxi services increase choice for customers

When Uber launched in London, it wanted to offer a high-quality experience rather than just
getting passengers from A to B. It used premium vehicles with plenty of legroom and offered
bottles of water, snacks and magazines for the passenger. Today, Uber offers customers the
choice of hybrid cars, electric cars and different service levels. UberX is affordable everyday
travel, Uber XL is for larger groups and Uber Exec and Uber Lux offer premium rides in high-
end cars. Black cabs have responded by offering additional services such as free Wi-Fi and
electronic payment systems.

© Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.
Extract C – The impact on labour markets around the world

Drivers who work for app-based taxi-service providers such as Uber, Lyft and Grab are
typically classified as self-employed and as such have few employment rights or protections.
It is argued that drivers in this market are open to potential exploitation from the app-based
service provider. As these app-based taxi-service providers have grown across the world,
they have come under increasing scrutiny over passenger safety and how they treat their
drivers. For instance, Uber has been engaged in court battles over whether it is an employer
or simply a mobile-phone app. The key issue is whether these app-based taxi-service
providers should be more heavily regulated to ensure they provide benefits to drivers, such
as a guaranteed minimum wage, sick pay, holiday pay and maximum working hours, as well
as responsibility for passenger safety.

Extract D – Dynamic pricing strategies

The prices charged for black cabs in London and yellow cabs in New York are strictly
regulated. Prices are based on published rates per unit of distance travelled and are
displayed on a price-meter throughout the journey. This means that every cab charges the
same fare for the same distance travelled. However, app-based taxi services use flexible
pricing systems, which means that the charge to the customer varies according to location,
time of day and overall demand, as well as distance travelled.

© Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.