Stringent rules and regulations govern the taxi industry. App/internet-based taxi services are often accused of unfair competition with the local taxi market, and this has resulted in various standoffs between the major players and authorities and taxi associations.

In the United Kingdom, Uber is accused of having a driver registration system that is easy to cheat. In November 2019, it was found that nearly 14000 customers have taken rides with unregistered drivers. According to regulators and authorities, this led to traffic congestions, tax evasion, unfair competition with traditional taxi drivers and compromised safety. In 2017, Uber was accused of neglecting the safety of riders and not sharing the data with the operator. This resulted in the cancellation of Uber’s license. Uber is banned in Barcelona, Frankfurt, and Budapest.

In 2015, China’s transport ministry released a set of rules and regulations to integrate internet-based car-hailing services with the taxi management system. However, these regulations had mostly negative impacts on the taxi market. The government controls the entry and exit of taxis in the market. The population of Beijing rose by almost 50% from 14 million to 21 million during 2004-2015, however, a number of taxis experienced a minute increase from 65000 to 66000 during the same period. This is resulting in a widening of demand and supply gap. Fare control is another reason that is damaging social welfare. Insufficient sharing of information between the market and the government is leading to inaccurate equilibrium prices, which results in the customers ending up paying higher prices than the actual price. Reduction in subsidies for drivers and customers is also a major factor responsible for hampering the growth of the market.

In India, Ola’s license was canceled for 6 months in March 2019 by the Karnataka State Transportation department on account of operating a bike taxi service, while Ola only had the license to operate 4-wheeler taxi service.

The taxi market is on the rise in the Asia-Pacific. Players, like DiDi Chuxing, Ola, and Onda, are using the high smartphone penetration rate in Asia-Pacific to their full advantage and are capturing the market share through innovation and cutting-edge technology. These South Asian taxi giants are acing the competition in local geographies and are expanding overseas. Chinese taxi giant Didi Chuxing has started operations in Mexico, Australia, Costa Rica, Japan, and many other countries, whereas the Indian market leader Ola is serving in Australia, New Zealand, and the United Kingdom.

In China, DiDi Chuxing holds 90% of the market share and serves more than 550 million customers. DiDi Chuxing is all set to launch its self-driving robo taxi service in Shanghai, China, and it raised an independent company Didi Autonomous Driving after the government permitted the testing of autonomous vehicles in August 2019. According to Tiger Qie, DiDi’s Chief Technology officer and Vice president, only 65% of customer requests are being fulfilled by DiDi at present. The introduction of robo taxis is a move that will narrow the demand and supply gap.

In India, the taxi market is evaluated at nearly 10 billion dollars, and it is expected to reach 25 billion dollars by 2025. Ola holds a market share of 58% (app-based/organized taxi market). Uber stands second with a market share of 38%. The competition in India is very stiff and sophisticated. Although smartphone penetration is satisfactory, Ithe country still struggles with poor internet connectivity and transport infrastructure. Ola is expanding and now provides services in 125 cities, whereas Uber is strengthening its technological framework although it is functional in 36 cities. Owing to the rise in disposable income of Indian customers and its increased expenditure on travel, key players are now introducing value-added features, like rear-seat entertainment, WiFi, and outstation services to gain market share in niche segments.

In South Korea, Seoul Taxi Association and Seoul Private Taxi association entered into a partnership to launch Onda. This taxi service uses artificial intelligence to optimize and enhance the customer experience. In existing apps, whenever a customer initiates a request, it goes to available drivers in that area. If the destination is far away from the pickup point, the drivers tend to ignore the request, creating difficulty for customers. Onda, however, automatically deploys the driver closest to the customer in one-kilometer vicinity.