Uber vs Licensed Taxi Drivers: A War Between Technological Standards

Sha­ring eco­no­my firms, based on onli­ne plat­forms, have beco­me strong com­pe­ti­tors of tra­di­tio­nal firm­sin many servi­ces sec­tor, inc­lu­ding the taxi indu­stry. The aim of this artic­le is to pro­vi­de an eco­no­mic­fra­me­work for the ana­ly­sis of this rival­ry. Besi­des the lite­ra­tu­re on sha­ring eco­no­my, the cha­rac­te­ri­stic­sof onli­ne plat­forms are sum­ma­ri­sed, which expla­in the quick expan­se of suc­cess­ful sha­ring eco­no­my­ven­tu­res. Based on the the­ore­ti­cal lite­ra­tu­re it is shown that for servi­ce pro­vi­ders, the cho­ice betwe­en­sha­ring eco­no­my plat­forms and tra­di­tio­nal firms resem­bles the ”stan­dard wars”, the com­pe­ti­tion betwe­en­tech­no­lo­gi­cal stan­dards. A coor­di­na­tion game is pre­sen­ted to ana­ly­se the com­pe­ti­tion betwe­en taxi­com­pa­nies and Uber. The model not only reve­als the dif­fe­rent equ­ili­bria and the possi­ble stra­te­gies ofthe play­ers, but also shows the impor­tan­ce for ade­qu­ate regu­la­to­ry policy.