Corporate failures: The case of TaxiForSure

Abstract

The Taxi Industry in India is governed by the Central Motor Vehicles Act, 19881 which provides a broad framework to establish rules for permits, regulation of prices, working hours for drivers etc. The established framework can be changed by the states which have more often than not been passive to act through industry wide changes. The industry has been predominantly an unorganized sector. We can conveniently divide the business historically into two eras – Preaggregator and post-aggregator. Before the advent of on-demand Cab services, city wide taxis with distinctive combination of yellow/black livery provided point to point taxi service in major metros of the country. Beginning from the Licence Raj, the regulations required them to have fare-meter necessarily installed, along with fixed fare structure and fuel type regulations. The taxi and rickshaw associations served as vote banks for politicians and arm twisting mechanism for the unions of the country. Inevitably, the quality of taxi services remained poor and an average commuter would dream of owning his/her personal vehicle to shun the old taxis.