COVID 19 AND ITS IMPACT ON THE TAXI INDUSTRY

COVID 19 AND ITS IMPACT ON THE TAXI INDUSTRY

Corona Virus has altered the social and economic fabric of each country around the globe. In most countries, life came to a halt as businesses and offices went under a lockdown for months; affecting the taxi industry as the demand for cabs decreased significantly. Few industries have been hit as hard as public transportation. The lockdowns depleted all but essential travel resulting in a massive drop in the transit ridership.
We witnessed a drop in Covid 19 infections in late summers therefore, lockdowns were lifted gradually all around the world. Sadly by this time, most taxi companies had already taken a severe hit. Sharks like Uber technologies and Lyft also took a blow in the US as travel restrictions and lockdowns increased but recovered fairly quickly once the restrictions eased. Unfortunately, several other taxi companies could not make ends meet and closed down.
For instance, we can discuss the case of the yellow cabs of New York. It is a well-known fact that yellow taxis have been a remarkable symbol of New York City’s hustle but eight months into the pandemic and the industry is crushed. Pre Covid 19, the yellow taxis would be crowding the streets-taking passengers back and forth but things have changed. They have truly suffered a great deal as offices closed down, tourism is virtually nonexistent, and so airports are mostly empty.
Pakistan’s taxi industry has also taken a massive blow during the pandemic as the country witnessed a lockdown for several months and the demand of e-hailing a taxi dropped significantly. Local taxi drivers lost most of their passengers as people generally feel that the risk of covid 19 is higher in a yellow cab as compared to a ride-hailing company car.
It has been observed that many taxi drivers stopped working because of the virus and news of other drivers dying of the virus, and started to rely solely on government packages. The relief packages and other similar programs which kept the drivers afloat only lasted two months as it was not a long term solution.

European countries lost 80 percent of their ridership in the initial phase. Paris is a prime example in the current scenario as its ridership is still 40 percent below normal even after a month of the lockdown lifted. The US lost over 75 percent of its pre-pandemic ridership and when the industry started reopening; taxi companies struggled to win back passengers.
China is also facing the same problem even though the economy had fully opened months ago. The gradual recovery could be due to many reasons. First, pandemic induced tele-activities might have lowered the overall travel demand. Second, travellers are avoiding using public transport for safety concerns. Lastly, social distancing has influenced the transit systems by lowering the capacity of passengers. A recent survey by IBM shows that nearly half of Americans would avoid public transport for safety reasons.
If things remain this way, we will witness a major shift in the mode of transport used by most people as they will wish to travel solo. Travelling solo will create a traffic crisis for cities. In fact, severe traffic jams due to safety concerns have been seen in the megacities of China.
Now that the world is hit by the second wave of covid 19, ride-hailing companies are experiencing pressure from the pandemic. The world is witnessing smart lockdowns to curb the virus and hot spots have started to shut down.

We have chosen Shenzhen, China as an example to analyze the impact on Covid 19 as it has been tracking its taxi fleet through a GPS since 2010 resulting in readily available data. Another reason is timing, the pandemic broke out in China. The entire city was closed down in January and started reopening in Feb with its economy in full swing by March. So in a span of two months, Shenzhen witnessed a lockdown, phased reopening, and official opening, making it an ideal choice to observe the impact of Covid 19.
On the demand side, we witnessed that the taxi industry lost 85 percent of its ridership due to work from home order. The demand did recover as the city opened but not completely. Even with the city reopened, the industry’s output was still 50 percent below normal; owing to people choosing driving to work rather than public transport. We also observed a massive drop in taxi demand in the city centre as compared to the suburb. Taxi trips in the suburb were also longer distances during and after the crisis. On the supply side, most taxi drivers cut back working hours due to the pandemic but those who used to work very hard were affected the most. After the city began reopening, most taxis adjusted their work to peak time.
Thus, taxi companies and drivers worked fewer hours and each of their working hours generated less revenue.

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