Essay on ECO561 Week 4 assignment

Submitted By Katgurl14
Words: 863
Pages: 4

Track a Cab
Roxann Jones
ECO561
July-6, 2015
Mathewos Kassa
Track a Cab
Myself like many other people in the world hate waiting for cabs. When you call for a cab they give you a time frame that most of the times are not accurate. I propose an app (application on your phone) that allows you to not only book a cab, but to also track and see what cab company can get to you sooner, and then book that cab. This app will also allow you to cancel a cab if another one can get to you sooner. This app will be downloaded in each cabs system so that each cab driver can keep up with what is going on.
There is a similar company by the name of Uber that offers similar services. However is killing the business of the regular cab companies. Uber did not enlist all the taxi cab companies; instead they picked out a few elite cab services, and are following their own set of rules. According to "How Uber Distrupts The Taxi Market" (2015), “However, the incumbent cab companies are still largely subject to a set of regulations that Uber is trying to evade. Many of these regulations serve legitimate public purposes, even if they may not be the best way to achieve the goal intended.” Uber seems to be trying to take over the taxi cab business instead of bringing it together.
The market structure for the current cab industry is that it relies solely on the dispatchers to send out jobs to the cab drivers. Rather the dispatcher is on a computer or on the phone there is someone sending out these assignments, which is just wasting more time. With this app a person will be able to request a cab, and whatever cab driver is available will be able to just except the job by pressing a button on their receiver. To prevent the customer from having to wait too long to get a cab all the cabs GPS will be able to tell which cab is the closet, and if the cab driver that is wanting to take the trip is too far away than they will get a message back telling them that they are more than 10 miles away and therefore cannot except the job. This will help to ensure more trips are able to be made in more areas, thus increasing business.
When thinking in terms of price I think the pricing should only be slightly changed. For example if the current price of a cab is $3.00 a mile than it should increase to $3.25 or maybe even $3.30 a mile. The reason being is that the expected increase in business because of this app will be tremendous. Over the years many different taxi companies have made changes that have helped improve business but the taxi cab company just needs to take that one final step to help take them beyond the results of a dispatcher. According to "Taxi Business Plan" (1996-2015), “Although the taxi cab industry was not regarded as demanding in a high degree of technology, several innovations have changed the way businesses operate. Computerized dispatching--in which cabs were tracked by computer and dispatch instructions appeared only to the cab assigned to a call--allowed more efficient assignment of cabs to passengers”(4.1 Market Segmentation). Producing quicker results help to increase the overall business of a taxi cab company. To overall help the increase in business I suggest that the taxi companies run ads (for instance computer and smartphone pop-ups) to…