The regulated taxicab industry arose to meet a common but difficult to solve challenge: how to make custom transportation available in a safe, predictable manner. For decades, the taxi industry was a relatively staid one; while it may not have been highly profitable, it was attractive for operators, largely due to the predictability afforded by the protections of limited competition, thanks to local regulators. Limited competition may have contributed to less investment in brand differentiation and customer satisfaction, as local operators had stronger incentives to pocket the earnings rather than reinvest.

However, running a taxi company is a complex, high-overhead, low-margin business, with poor customer satisfaction. (To run a taxi business, an operator must procure an expensive license from the local municipal government, buy or lease a fleet of cars, hire and manage drivers, handle scheduling and dispatching and handle administrative items such as insurance, payroll, etc.)

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