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In 60 Seconds: An economist explains Uber

In 60 Seconds: An economist explains Uber

Uber has completely changed the way that I travel, but its impact on the transport industry is often overlooked. I spoke to…

Name: Rachel Power

Studied: Bachelor of Business (Honours) in Economics at UTS

Career post graduation: Graduate Economist at Deloitte Access Economics

In 2012, it was estimated that Cabcharge and another taxi company Premier owned 80% of cabs on the Sydney streets. Rachel calls this a “monopoly” and other economists agree due to how interlinked the two taxi companies were.

'As they had no one to compete with,

 

Uber completely disrupted the market by providing consumers with an alternative that was cheaper and more convenient.

“It also meant that the taxi industry had to become more competitive in how they priced, how they treated their customers and what kind of services they provided”, Rachel explained.

Rachel is right - in 2018, Cabcharge invested '

 

However quickly Uber may be growing, it is yet to win the race.

In an average 3 months, 20.8% of Australians use Uber – but in an average 3 months, 21.5% use taxis.

See Also


This could be due to surge pricing. While you can usually expect a cheaper fare with Uber, it’s not always consistent.

In 2018, there was a backlash against Uber's surge pricing and

 

It seems to me that this race will continue for a long time. But as Rachel suggested, there’s nothing wrong with a bit of healthy competition.

 

Learn more about the Bachelor of Business at UTS.

Also make sure you check out Rachel explaining climate change and the financial news in 60 seconds.

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