1. How attractive was the taxi industry before Uber and other ride-hailing players entered the market? (Hint: Use Porter’s five force model to answer this question)
Requirements: 1.5 page
Answer preview
According to Wu (2017), the taxi industry was unattractive before the introduction of Uber due to the high restrictions and licensing controls system known as medallions. Under the Haas Act enacted in 1937, the Taxi and Limousine Commission (TLC) regulated the taxicabs and granted them the rights to carry clients if they met the requirements. One of the requirements was to have a metal plate attached to the car’s hood to show the drivers had the right to carry passengers. Based on the regulations, there were two types of medallions, independent and corporate, in the ratio of 40:60, that had the licenses to be on the streets (Wu, 2017). Still, the drivers did not earn much, considering they had to cater for maintenance costs and licensure.
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