Evaluating the impact of Uber on London's taxi service: A critical review of the literature

• Published date: 01 January 2019
• Author: Walter Skok,Samantha Baker
• Date: 01 January 2019
• DOI: http://doi.org/10.1002/kpm.1573

RESEARCH ARTICLE

Evaluating the impact of Uber on London's taxi service: A

critical review of the literature

Walter Skok |Samantha Baker

Kingston University London, UK

Correspondence

Walter Skok, Business School, Kingston

University, Kingston Hill, Kingston upon

Thames, Surrey KT2 7LB, UK.

Email: wskok@kingston.ac.uk

Uber is a very well‐funded operation that has made innovative use of smartphone

technology in the highly regulated and bureaucratic market of international taxi cab

operations. The company has often adopted an aggressive approach when entering

the marketplace in a given city, so the question arises as to how should the incumbent

taxi trade react to such fierce competition that is popular with the public.

This paper describes a literature review related to the taxi and private hire industry in

London that provides a foundation to answer this question. A second paper will pres-

ent recommendations to help organisations prepare a response to the new

competition.

From the collated journals, various themes emerged, and their reference lists were

analysed to review recurring authors. The literature was organised into a thematic

analysis grid to critique the content and analyse the implications for a project to eval-

uate the possible way forward for the taxi trade in response to Uber's aggressive

approach. Six key themes were identified: disruptive innovation, sharing economy,

business model, historical context, regulations, and labour.

The literature review was extended to include studies of the same area in the United

States. Caution was exercised, as the U.S. market operates different ground transpor-

tation services and regulations. Nonetheless, comparisons were drawn regarding fac-

tors that were similar.

The identification of the six key themes will aid the taxi trade as well as researchers

who wish to investigate the impact of Uber as and when it moves into new interna-

tional markets.

1|BACKGROUND AND FOCUS

1.1 |Introduction

London's private hire vehicle industry (sometimes known as

“minicabs”) provides a “pre‐book”vehicle service for passengers. The

term private hire differentiates the service from taxis (black cabs)

who retain the privilege of being able to “ply‐for‐hire,”that is, being

hailed on the street, in addition to being pre‐booked. The private hire

service complements other ground transportation methods such as

the underground (metro), buses, and trains.

Thesize of the UK taxi and privatehire market is estimatedat £9.4bn,

with an expectedcompound annualgrowth rate of 1.1% to reach£9.9bn

in 2021–2022.The industry is mature,with high levels of revenuevolatil-

ity, technological changes,and competition, with low barriersto entry.

Recent figures indicate that London's private hire market com-

prises 2,445 operators, 116,453 drivers, and 88,412 vehicles. Since

2012/2013, operator numbers have declined by 23%; however, driver

and vehicle numbers have increased by 74% and 77%, respectively

(Transport for London, 2017).

Transport for London (TfL) regulates the London industry and

implements the Mayor's Transport Strategy. Within TfL, the Taxi and

Private Hire (TPH) division acts as the regulator, licensing, enforce-

ment, and strategic transport authority. Key stakeholders in the indus-

try are the Mayor, TfL/TPH, operators, trade associations, trade

unions, drivers, passengers, and the public.

Received: 30 April 2018 Accepted: 2 May 2018

DOI: 10.1002/kpm.1573

Knowl Process Manag. 2019;26:3–9. Copyright © 2018 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/kpm 3