Journal of Student Research 2018

Journal Student Research

52

Economic Forecast To capture the estimated fare impact if Uber entered the marketplace

in Menomonie, Wisconsin, I use the estimation results for the model using 10-mile fare. 6 To simulate the effect of Uber entering the market, I must gather data for each of my variables for Menomonie. In Menomonie, the 2010 population was 16,264, there is currently no presence of Uber, and is in the Midwest region. The results of the model estimate the average 10 mile taxi fare to be $31.84. If Uber entered the marketplace, the average 10-mile fare would change by the estimated coefficient from my estimation results. Based on this simulation, the presence of Uber would result in a $29.49 average 10-mile taxi fare, as displayed in figure 3. Overall, the total net benefit of Uber entering Menomonie would be a $2.35 decrease in the average 10-mile taxi fare.

Conclusion Ride-sharing platforms continue to expand, taking advantage of * = 90% significance, ** = 95% significance, *** = 99% significance the available technology and tech-savvy populations. These technology companies operate with much lower costs than the taxi industry and are subject to lesser government regulation and taxation. The purpose of this study was to determine if the entrance of these ride-sharing companies impacts taxi fare, while specifically examining one such ride-sharing platform: Uber. Estimation results demonstrate that, on average, 10-mile taxi fares decrease $2.35 due to the presence of Uber. The financial and convenience benefits that Uber provides to consumers continue to gain the company market share in the transportation industry.

6 The application of the model is for simulation purposes only. Several differences exist between the City of Menomonie and the cities included in the study. The results should be examined with caution.