Big data reveals Uber is all upside

January 2018

The upsurge in Uber’s ride-sharing service has been resisted all over the world – mostly by licenced taxi interests, fearing the winds of competition would take away passengers.

In a show case of the unprecedented power of big data to deliver insights into ‘what’s going on?’ in a market, recently published HoustonKemp analysis shows those fears are misplaced.

Following drawn out regulatory and enforcement skirmishes, Uber’s ride-sharing service was finally legalised in New South Wales in late 2015. Since then, would be point to point passengers have been free to choose between a regular taxi or its close substitute, a ride-sharing service.

In a recently published study for the NSW Independent Pricing and Regulatory Tribunal, my colleagues Adrian Kemp and Howard Gu analysed millions of payment card transactions, seeking insights into how the point to point passenger transport services market in NSW has changed since the legalisation of ride-sharing services.

Their analysis shows dramatic increases in the use of point to point passenger transport services, but little change in the expenditure on rides taken by taxi. In a huge win for passengers, in just 18 months Uber has expanded the market by more than sevenfold – as illustrated below.

IPART graph.png

Hundreds of thousands of people in NSW are now opting to use a ride-sharing service on occasions when, before, they would presumably have either walked, caught a bus or train, or perhaps not travelled at all.

These extraordinary results underline the huge potential for markets to grow when new services are unleashed, and the enormous benefits to consumers from the ‘disruption’ that is ride-sharing.

Our report can be found here

Posted on January 12, 2018 and filed under Articles.