Understanding the unbalance of interest in taxi market based on drivers' service profit margins

Beibei Hu, Yawen Kong, Mengge Sun, Xianlei Dong and Gang Zong

PLOS ONE, 2018, vol. 13, issue 6, 1-18

Abstract: Nowadays, ride-hailing services have been established as a part of the urban transportation. Their arrival has remade the profit structure and resulted in the unbalance of interest in taxi market. Here, we establish the service models of taxis, carpooling, and car-hailing under “Internet +” from the perspective of profit margins, to perform a comparative analysis among the different services. Results: First, Profit margins are generally higher for short trips than for long trips, though empty cruise fee to a certain degree make up for the driver’s decreased profit margins. Second, the profit margin for carpooling is roughly 1.85 times that of ride-hailing, and 1.75 times that of taxis. This shows that the sharing economy has a certain advantage. Third, Profit margins are higher and fluctuations are lower on non-work days than on work days. At last, Profit margins are roughly 1.3 times higher on non-congested roads than on congested roads. The reduced profitability on congested roads makes it even harder to catch a ride during rush hours and on congested roads. We suggest that the relevant departments make appropriate efforts to make it more attractive for drivers to take on passengers during rush hours and on congested roads, and promote the sharing in the taxi market.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0198491

DOI: 10.1371/journal.pone.0198491

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