Discuss any five factors that can have a negative impact on your taxi business or industry
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Factors in the order of impact (Highest to lowest). The answer is more inclined towards India but remains relevant to other markets as well
Regulation
If the government decides no more app based taxi services.
Consolidation
Generally markets are dominated by 2–3 players. If M&A happens, that could lead to consolidation and a (pseudo monopoly).
We all know understand how does an oligopoly market operates. Use soft drinks market as an example
Alternatives
Except for 2–3 major cities in India, public transport infrastructure and penetration is low as compared to other developed countries. If a robust public transport is introduced, the share of taxi services is bound to reduce.
For a high level comparison, look at the demand of taxis in Singapore
Short term business model
Generally the companies offer heavy discount to get riders and driver on board in hope that they get used to the taxi lifestyle
Over the time, the discounts and high earnings vanish and riders opt for cheaper alternatives, while the drivers (majority from lower middle class) easily switch to other professions.
Lack of drivers reduces supply and raises the price, which negatively affects demand. This is a vicious circle
Technology Disruption
With the advent of electric and driver less cars, the taxi business is bound to be disrupted continuously at least for the next two decades. Early movers with deep pockets will adapt and survive, while the rest to be merged or move to ashes
Regulation
If the government decides no more app based taxi services.
Consolidation
Generally markets are dominated by 2–3 players. If M&A happens, that could lead to consolidation and a (pseudo monopoly).
We all know understand how does an oligopoly market operates. Use soft drinks market as an example
Alternatives
Except for 2–3 major cities in India, public transport infrastructure and penetration is low as compared to other developed countries. If a robust public transport is introduced, the share of taxi services is bound to reduce.
For a high level comparison, look at the demand of taxis in Singapore
Short term business model
Generally the companies offer heavy discount to get riders and driver on board in hope that they get used to the taxi lifestyle
Over the time, the discounts and high earnings vanish and riders opt for cheaper alternatives, while the drivers (majority from lower middle class) easily switch to other professions.
Lack of drivers reduces supply and raises the price, which negatively affects demand. This is a vicious circle
Technology Disruption
With the advent of electric and driver less cars, the taxi business is bound to be disrupted continuously at least for the next two decades. Early movers with deep pockets will adapt and survive, while the rest to be merged or move to ashes
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