Big data reveals Uber is all upside

The upsurge in Uber’s ride-sharing service has been resisted all over the world – mostly by licenced taxi interests, fearing the winds of competition would take away passengers.

In a show case of the power of big data to deliver insights into ‘what’s going on?’ in a market, recent HoustonKemp analysis shows those fears are misplaced.

Following drawn out regulatory and enforcement skirmishes, Uber’s ride-sharing service was finally legalised in New South Wales in late 2015. Since then, would be point-to-point passengers have been free to choose between a regular taxi or its close substitute, a ride-sharing service.

In a study published by the NSW Independent Pricing and Regulatory Tribunal, Adrian Kemp and Howard Gu analysed millions of payment card transactions, seeking insights into how the point-to-point passenger transport services market in NSW has changed since the legalisation of ride-sharing services.

Our experts’ analysis shows dramatic increases in the use of point-to-point passenger transport services, but little change in the expenditure on rides taken by taxi. In a huge win for passengers, in just 18 months Uber has expanded the market by more than sevenfold – as illustrated below.

Hundreds of thousands of people in NSW are now opt to use a ride-sharing service on occasions when, before, they would presumably have either walked, caught a bus or train, or perhaps not travelled at all.

These extraordinary results underline the potential for markets to grow when new services are unleashed, and the enormous benefits to consumers from the ‘disruption’ that is ride-sharing.

Our report can be found here.

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