Uber: The Decline Of The Tax Industry

Although Uber was funded in 2009, the decline of the taxi industry around the world did not begin until 2013 when commuters in metropolitan areas discovered the Uber application on their cellphones. Uber is an online transportation network company that allows users to connect with drivers nearby instead of being forced to hail a taxi. Uber customers found that the ride service was more convenient, affordable, and customer friendly than most cabs, and drivers found that it provided exceptional pay and personalized driving schedules. Although the application has been equally beneficial for both Uber users and drivers, it has had a disastrous effect on taxi cab companies around the globe (Nelson, 2016). The rise of Uber in major cities across

In many areas, so many rides have been lost to Uber that drivers travel less than two hundred miles a day, making it impossible to earn enough money to survive off of in large cities. After paying for insurance, gas, car leases, and company fees most drivers only earn an average profit of $450, nearly half of the $800 average from two years ago. “For a customer, Uber is very good, but for the driver, it is very bad,” said Paul Ezadjian from Los Angeles Checker Cab Company (Nelson, 2016). As the personal ride service continues to grow, the value of the New York taxi medallion keeps decreasing steadily. After hitting an all-time high of $1.3 million in 2013, the price of a taxi medallion has fallen to nearly a quarter of its value, roughly $840,000 (Caruthers, 2015). Medallion prices have recently fallen in other major cities such as Boston and Chicago as well. Uber’s unbeatable rates have also caused some taxi services, such as the Yellow Cab Company, to file for bankruptcy protection and sell their cars. Meanwhile, Uber has risen in net worth by $2.1 billion for a $62.5 billion valuation. Despite the disastrous effects of Uber on the taxi industry, there has not been a single cab company that has gone out of business yet in the United States (Stenovec,

In Europe, taxi drivers have launched dozens of strikes to protest the ride sharing service. A recent protest in Paris, France resulted in furious taxi drivers burning car tires, attacking people they thought were working for Uber, and several people being arrested for violence. Nearly three hundred drivers blocked the busy Paris streets with their cars, their windows were covered in signs that read “Death to Uber” and “Uber Go Home”. Many Parisian taxi drivers referred to Uber as an “economic terrorist” and a “war machine”. In 2015 more than ten thousand people participated in a one-day protest against Uber in cities like London, Madrid, and Milan. Several European cities, including Berlin and Amsterdam, have banned some of Uber’s services due to the severity of the taxi drivers’ strikes. Some countries have also banned Uber completely. There has also been a rise in Uber related protests in California, Texas, New York, Mexico, and Canada (Rubin and Scott,