Non-Adoption of Dynamic Pricing in Traditional Taxi Dispatch Organizations

Abstract

Dynamic pricing (DP) was introduced into the taxi industry through ride-sharing platforms such as Uber. Prior research has identified benefits of DP for ridesharing organizations, drivers and consumers. A legal reform in Finland in July 2018 made DP of taxi rides legally possible. However, even though traditional Finnish dispatch organizations have adopted different technology (e.g., ride-hailing apps), they have not adopted DP. To find out the reasons for the non-adoption, we conducted a qualitative case study among Finnish dispatch organizations. Utilizing IT artifact as an analytical lens, we identified ten aspects related to the technology, the structure and the context within which DP is embedded that help explain why it has not been adopted. We propose that DP in the taxi industry should be seen more broadly than just as "Uber-type" realtime DP, as it has been viewed in previous literature. Our findings have implications for research and practice.

A fairness-aware joint pricing and matching framework for dynamic ridesharing

“…Meanwhile, dynamic pricing is a popular topic when providing ridesharing services, as in [7], which develops a dynamic pricing method to optimize the profit of the on-demand shared mobility system. However, employing an opaque dynamic pricing algorithm and fare may confuse and annoy the ridesharing customers, thus preventing them from making a quick ride request or even using the system in the future [8], [9].…”