Driver perceptions on taxi-sharing and dynamic pricing in taxi services: Evidence from Athens, Greece

Abstract

The taxi industry has changed dramatically during the last decade, as ridesourcing applications, ridesharing, and alternative pricing schemes have emerged, either as complementing or competitive services and strategies. After some years of familiarity with such trends, it is interesting to explore where the taxi industry stands with respect to possible service innovations. This paper explores the behavioral patterns of drivers, focusing on issues such as their preferred way of conducting business and their views on introducing taxi-sharing and dynamic pricing. Data collected from a face-to-face survey in Athens, Greece, are exploited and appropriate econometric models are developed for the purposes of the study. The analysis shows that young and/or educated drivers, as well as those who are familiar with new technologies, are more willing to accept innovations in taxi services. Results from a stated choice experiment show that on average 3.5 euros is the extra charge that the taxi market would accept to offer a taxi-sharing service. However, results reveal that the value of taxi-sharing varies across different groups of drivers. Overall, findings indicate that in the years to come, competition by other services (e.g., ridesharing) will force the taxi industry to adopt new models of operation and pricing.