Operating Mode Selection Of Taxicab Under Free Option

Taxicab is a very important part of urban transportation system. The health and the development of taxicab industry are getting more and more attention. This paper focuses itself on the analyses of relationship between operating mode, organizing mode and regulation policy, in order to introduce a new view to the reformation and development of Beijing taxicab industry.Firstly, beginning with the definition of taxicab product, the paper analyzes the characters of taxi industry under different operating mode, and points out the disadvantages (Information Asymmetry and Unrepeated Game) under Cruising mode. Secondly, the paper points out that the academies have not paid enough attention to influence of the free option to the workable competition, especially in taxicab industry, and gives a relationship framework which explains the taxicab operating mode selection. Thirdly, talk about the analyses of Beijing taxicab problems. The problems rise from two sides, one is the operating mode, and the other is the government regulation. The cruising mode, which can not make enough incentives to build brand competition, leads to an 'area competition and quantity competition' structure. The government regulation endows the taxi company monopoly power through multi-regulation. The consequences of these two factors are the lack of consumer free option, and the lack of real enterprise competition with risk avoidance and high benefits. The consequences compose of the current phenomena and problems. Therefore, the author suggests the construction of competition platform through building phone-call mode and taxi-stands mode to actualize consumers' free option, which will introduce workable competition to achieve the maximum of social welfare eventually.The paper is composed of 7 parts. Chapter 1 introduces the current discussion on Beijing taxi industry and put forward the consideration of the operating mode. Chapter 2 introduces the basic definition and literature review. Chapter 3 & 4 analyze the influence of free option to the workable competition and the relationship between operating mode, organizing mode and regulation policy. Chapter 5 talks about the history of Beijing taxicab industry from 1992 till now, and gives a explanation to the current problems. Chapter 6 makes some constructive suggestions to actualization of the free option.