Implications of ride-sourcing and self-driving vehicles on the need for regulation in unscheduled passenger transport

Abstract

The recent emergence of large-scale ride-sourcing services, such as Uber and Lyft, is a major development in passenger transport. By utilizing fleets of private cars and app technology, these services call into question the definitions of private and commercial transport and challenge the existing transport framework in multiple ways. By operating between commercial and private services, they are partly outside the control of governments and, to some extent, contravene current regulations. In this paper, we combine the literature on regulation and economic properties of the unscheduled passenger transport markets with scenario analyses for examining how ride-sourcing and automated vehicles affect these markets. Our main findings are that the underlying economic mechanisms faced in markets dominated by ride-sourcing and automated vehicles have similarities with traditional markets. Hence, regardless of how the services are offered, some need for regulation will remain. However, as the market segments are different and a shift in their relative importance is likely, the possible and suitable forms of regulation will change.