Question
In which market structure dose the taxi market operating? Justify your answer.
Uber vs Grab vs Taxis: Which is Cheaper? veryone can now breathe a sigh of relief as the Cabinet has given the Land Public Transport Commission (SPAD) the go-ahead to regulate Uber and Grab ride-sharing services. In the latest Budget 2017, the government also encouraged Malaysians improve their income. to participate as Uber drivers to Uber, Grab or Taxi? Earlier, The Sun reported that the Government is mulling a new taxi fare rate as a measure to streamline and revamp the Teksi 1Malaysia (TEKS1M) and budget cab operations. To spice things up, Grab has also revised their rates recently and claim to be the cheapest car-hailing service in town! While it's still unclear what the new taxi rates will be, here's a cost comparison between Uber, Grab, and a local taxi fare as of today to help you decide the best value-for-money travelling option: Rone Cost Cost per KM M Types of 0.60 1.00 GrahCort toremium
Explanation / Answer
Taxi market is operating in monopolistically competitive market. This is because each company is offering differentiated product with different fares, features etc and advertising plays an important role in increasing the market share of the firm, also there is no restriction on entry and exit of the firm. Thus, taxi market is operating in monopolistically competitive market.