On-demand taxi services, have significantly impacted the taxi industry since their

introduction in the early 2010s. The aim of this paper is to provide a review of on-demand ride
services as an emerging technology. A critical analysis of the innovation’s benefits and
drawbacks will be examined to understand how it has impacted the transportation sector and
individual mobility for passengers. Additionally, a review on the integration of autonomous
vehicle technology will be explored to provide a comprehension of how it can be used to
improve the use of on-demand ride services.
The emergence of on-demand ride services has brought about positive impacts on the
development of urban areas particularly through their impact on the reduction of traffic
congestion. An analysis of how the technological innovation improves city traffic will be
discussed in a concise but comprehensive manner. Furthermore, the service’s environmental
sustainability will be accounted. Based on the reviews provided, recommendations on how the
services can be improved will be provided.
On-demand ride service providers ought to take into account methods for guaranteeing
access to services for individuals with disabilities. Considering the significance of ease of access
for all clients, which is often operationalized with regards to automobiles that can accommodate
wheelchairs, organizations and regulators need to tackle the prospective disparity involving
accessibility for individuals with different disabilities and other users as this new service grows.
On-demand service providers should meticulously analyze and take into account the
benefits and drawbacks of alternative occupation categories for their drivers. The new mobility
services present widened prospects for flexible, part-time jobs for young people, in search of
extra revenue from an additional occupation, as well as those in need of transitional earnings
between professions. However, the absence of the benefits, such as retirement savings, vacation
and sick leave, often offered to workers in other economic sectors raises crucial issues for public
policy relating to employer-provided medical care, employees’ reimbursement for mishaps, and
sick and vacation leave for individuals whom this kind of work is the single income source or a
preferred occupation.

Over the past few years, with the evolution of technological innovations, there has been a
rapid increase of platforms for on-demand ride services such as Lyft and Uber. Due to these
platforms, people in these modern times can ask for rides through their mobile phones rather than
hailing taxis on the streets, which was previously normative in large urban centers. Platforms for
on-demand ride services help link passengers with drivers (traditional taxi drivers and private
drivers) in real time. On-demand ride services are in the form of mobile applications which make
it possible for a passenger to plan and route a taxi, shuttle or bus to pick them up and drop them
off at specified destinations. The services are generating new business styles and reshaping the
transportation industry by enabling individuals to commercialize rides to clients.

The concept behind surge pricing is to modify ride charges to suit the supply of drivers to the
demand of riders at any period. In the course of profuse demand when riders become more than
drivers, or when the drivers are not enough and the waiting periods for clients are long, the on-
demand ride service administrators raise their regular prices.
 The rapid advancement in the utilization of new technologies such as on-demand ride
services is taking place amidst an increasing trend in travel by public transportation which started
off a decade ago. App-enabled transit solutions are one of the most outstanding innovations for
urban transportation in this era since the technological advancement being integrated for these
services have been enhancing mobility in ways that have been talked about for many years but
never before executed on a large scale. While travel by on-demand ride services presently
represents a fraction of overall trips, the outcomes of these systems on traveling and a prolonged
rapid growth of their ambit and operation may considerably impact individual travel in future.
On-demand services are designed for instant gratification, and endeavor to give
consumers what they want, when they want it. If a customer needs a ride, right this moment,
from their downtown office  to a meeting on the other side of the city, an on-demand platform
will locate the closest available ride, connect the vehicle and customer digitally and offline, and
optimize the route in real-time for fast arrival to the desired destination. On-demand services
mediate between all relevant parties in a fast and efficient manner.
Alonso-Mora, J., Samaranayake, S., Wallar, A., Frazzoli, E., & Rus, D. (2017). On-demand
high-capacity ride-sharing via dynamic trip-vehicle assignment. Proceedings of the
National Academy of Sciences, 114(3), 462-467.
Traffic congestion continues to be a great problem in large cities. Although there is no
comprehensive agreement regarding the most effective approach to get rid of traffic jams, the
rate of carpooling has grown over the past few years. Whenever individuals carpool, they
minimize the need for 8 to 12 cars on the road for every shared vehicle which additionally lowers
the cost for maintenance.
Through a computer simulation, [[[]] determined that carpooling services such as Lyft and Uber
can cut down the number of taxi automobiles on highways by 75% devoid of considerably
affecting travel periods. Their research demonstrates that a ride-pooling service can offer a
significant improvement in the transportation systems of metropolitan areas.

The scale effect refers to the consequence on desired job of a larger or smaller production scale.
For instance, in case incomes increase, this often signifies elevated costs for the organization and
furthermore increased product costs for the customer.

On-demand ride services can be enhanced by the utilization of Autonomous Vehicles

(AVs) to minimize the cost of manpower, and employment of various groups of automobiles to
widen the accessibility and coverage of services. Autonomous vehicles are outfitted with AI
(artificial intelligence) sensor software and hardware which enable the determine the position of
surrounding cars, manage pedestrian traffic in towns and cities, observe its surroundings,
prognosticate other road users' behaviour, and accurately plan appropriate actions. Since
autonomous vehicles are not often involved in road accidents, their prospect to alleviate traffic
congestion is substantial. In addition to that, considering that self-driving automobiles are
connected with each other and can communicate with one another, they would get rid of the
dependence on traffic indicators. By operating at a slower rate but with minimum stops,
autonomous on-demand ides can synchronize traffic and bring about less congestion.
On-demand: Ride-hailing apps

For supporters and detractors alike, few services exemplify the modern “on-demand”
economy more than ride-hailing apps. Unlike traditional taxi cabs that require customers to hail a
car on the street or call into a central dispatch, these apps allow users to request a ride using their
smartphone, track the progress of their driver in real-time, and offer an integrated payment and
ratings system. The drivers for these services are frequently part-time or “gig” workers who use
their own vehicle and combine their ride-hailing work with other sources of income. For
instance, a 2015 survey of Uber drivers found that around six-in-ten drivers work another job in
addition to driving for Uber. Indeed, the phrase “Uber for [X]” (along with Lyft, its main
competitor, Uber is the largest and most well-known of these services) has become technology
industry shorthand for a range of services that let users connect in real time with people who are
willing to be hired to do various tasks – such as doing laundry, buying and delivering groceries
or cooking dinner.

With taxi apps and the likes of Uber and Careem increasingly parts of our daily lives,
those among us who navigate the UAE’s highways and byways without their own car are no
strangers to relying on their phones to secure transport at the tap of a touchscreen. But ekar and
Udrive are two services in Dubai that are bridging the huge gap between somebody else taking
the wheel for you and buying or renting a car to pilot yourself on a permanent basis. With both
ekar and Udrive, you enter your personal details, including driving-license information, take a
selfie with your ID and upload that and pictures of your driving license and Emirates ID (both
front and back). Udrive differs slightly in that you can use your passport instead of Emirates ID,
should you prefer. Once you have input payment details, your credit card will be charged a Dh1
sign-up fee, then you are ready to go. Much like regular rentals, it is your responsibilities to
notice any pre-existing damage and report any you cause; if you are in an accident, you call the
police as you would while driving any other car.

Benefits of On Demand Services Compared with Conventional Taxi Services

On-demand taxi services, also referred to as ride-sharing services (e.g. Uber, Lyft, and the
Chinese Didi equivalent), have significantly impacted the taxi industry since their introduction in
the early 2010s. The evolution and growth of these services have reached a point where
conventional taxi services are not able to effectively compete and are losing market share.
Empirical evidence underlines that on-demand services can increase the productivity of vehicles
between 30 and 50% compared with conventional taxi services. The main factors underlining the
advantages of on-demand services include:

 Driver and passenger matching. On-demand services rely on advanced matching

systems that try to optimally assign a driver (vehicle) to a passenger. This dominantly
relies on mobile technologies able to match geo-located demand and supply on a real-
time basis. This matching takes several factors into consideration and tries to optimize the
 system as a whole. For instance, a vehicle close to a customer may be assigned a
customer further away if assigning another vehicle would reduce the total travel distance.
Additional options, including the willingness to share a ride with other passengers, are
also offered. Comparatively, conventional taxi services usually assign drivers on an ad
hoc basis (such as on-street hailing), which is often efficient (because of long term
knowledge of the demand) but does not work well with complex demand patterns with
customers expecting a ride available within a few minutes.
 Scale effect. On-demand services usually benefit from a scale effect by being able to
offer services over a larger area and by being able to field more vehicles. They thus have
a greater ability to match supply and demand across a metropolitan area and have drivers
competing for customers. For instance, demand varies daily in different parts of a city,
with vehicles being repositioned accordingly. Conventional taxi services are often limited
to a specific area and are much less likely to be able to reach scale effects.
 Supply and fare flexibility. An important advantage of on-demand taxi services is their
ability to quickly adapt to changes in the demand by increasing the number of vehicles as
well as increasing fares in situation of acute mismatch. They adopt yield management
strategies, known as surge pricing, where users are notified of the increase in the fare
structure and therefore given the option to travel at a higher cost or delay their travel until
fares decline. From a supply perspective, higher fares incite additional drivers to make
their vehicles available, conferring a flexible mechanism to adapt supply with demand.
Conventional taxi services, because of the regulatory constraints, usually offer a stable
number of vehicles, often working in shifts, are less able to adjust to demand changes.
While fares usually remain the same, a surge in the demand commonly involves users
waiting longer to take a ride, particularly during peak hours.

Disadvantages
Surge Pricing

"Surge pricing" for Uber or "prime time pricing" as it is called for Lyft, is controversial and a
major annoyance for most customers. Surge pricing is a method of pricing in the free market that
involves raising or lowering prices depending on supply and demand. For Uber customers this
means how many cars are available (supply) and how many passengers want to ride in them
(demand).

Depending on the intensity of demand, prices for Uber services may be increased by a certain
percentage. At super peak times, they could even be doubled or tripled. These fare hikes
take effect during periods of high demand for cars, such as rush hour or during rain and
snowstorms.

Safety Concerns

Safety concerns have also emerged in many cities and states where the transportation industry
regulations are lax and average citizens can easily enter the e-hail network as service providers.
Although this has a positive effect by increasing the supply of drivers, these drivers might not be
as motivated to reach high standards of professionalism and safety.
Negative Impact of Price Competition

Price competition can be destructive for any industry. Increasingly, Uber, Lyft and other e-hail
services are engaged in an intense battle to provide the cheapest service. They are directly
competing with existing traditional taxi and car services for both customers and drivers. This has
led to the drop in taxi medallion and black car prices in New York. That is good for drivers, but
bad for other traditional taxi and car service groups. 

Autonomous Vehicles for On-Demand Ride Services

Since the arrival of ride-sourcing services in 2009, the availability of door-to-door
transport in many cities has changed radically. Schaller (2017) has recently described how the
habits of New Yorkers have changed in this regard, with enormous growth in market size and
loss of market shares for both taxis and transit. Similar developments have been observed in
many other cities, including London (Dudley, Banister, & Schwanen, 2017) and San Francisco
(Rayle, Dai, Chan, Cervero, & Shaheen, 2016). Although there is still debate around whether
ride-sourcing is a substitute for or supplement to public transit (cf. Hall, Palsson, & Price, 2017;
Sadowsky & Nelson, 2017), ride-sourcing is a new and significant mode of travel in many cities
and around the world—at the time of this writing, ride-sourcing companies are still growing
rapidly.
Although automated vehicles operate with a combination of technologies that already
assist the task of driving (Baker, Wagner, Miller, Pritchard, & Manser, 2016), autonomous self-
driving vehicles as a commercial option in most cities are still a long way off. By autonomous
self-driving vehicles, we are referring here to vehicles operating at levels 4 or 5 within the SAE
International (2016) taxonomy.1 Self-driving technology has seen rapid development, with some
major companies—e.g. GM, BMW, Ford and VW—aiming to achieve level 4 automated
vehicles (full self-driving automation within a defined area) as early as 2020–2024. Tesla, and
Google through their subsidiary Waymo, have suggested that they will operate level 4 vehicles
on the market even earlier, based on their ongoing pilots. If—or when—this is achieved, it will
likely have a significant impact on the way cars are used and owned, including implications for
the kinds of door-to-door services offered to the travelling public in cities, both how they are
offered and who is offering them.

Impacts of On-Demand Ride Services on Congestion

Ride-hailing adds a total of 5.7 billion miles of driving each year in the nine metropolitan
areas (Boston, Chicago, Los Angeles, Miami, New York, Philadelphia, San Francisco, Seattle
and DC) that account for 70% of such trips in the United States. [3] At least 40% of the time,
drivers are traveling without passengers in the car, adding more miles and vehicle emissions that
wouldn’t exist without ride-hailing. [3][2] As many as 60% of riders would have used public
transit, walked, biked, or not taken a trip at all if ride-hailing wasn’t an option. [9] That means
that nearly two-thirds of ride-hailing trips added additional cars to the roads. [10]
 Studies show that ride-hailing makes traffic worse during already congested rush hours,
because of the extra cars they add to the road, and because these drivers look at their phones
more for passenger pickups and directions. [9][10] Researchers found that ride-hailing
contributes to a net increase in greenhouse gas emissions. [2]

Environmental Sustainability

Each of the various ride-hailing businesses vary in their environmental impact – companies like
Blablacar that facilitate carpooling across states and countries, especially in Europe, offer
flexible services, for both the driver and the passenger, that allow people to easily communicate
and coordinate rides together. As a company that reduces the number of cars on the road, this is
clearly a company that encourages environmental sustainability.

However, for shorter distance ride sharing, like Uber and Lyft, the benefits may be reduced.
According to Lyft Co-founders John Zimmer and Logan Green, all Lyft rides are now carbon
neutral. This multi-million-dollar investment makes Lyft, which is limited to the US, one of the
top voluntary purchasers of carbon offsets in the world. Uber, which is a larger and international
operation, has made no pledge to compete with this. While Lyft has demonstrated the desire to
reduce their environmental impact, speculation suggests this new policy may be an attempt by
Lyft to relieve criticism on the ride-hailing industry, which overall puts more cars on the road.

Due to the ease of apps like Uber and Lyft, people often opt out of public transit for an easier
form of transportation that requires less effort, especially in foreign countries where public
transit may be more complicated by language barriers. Uber requires drivers to have cars that are
within a certain age limit, which may help the overall output of emissions from cars. However,
public transit is significantly better for the environment than driving individual cars.  Uber can
deter people from learning about public transit, even in areas where it is made extremely
accessible, like in many European cities.
Hall, J. V., & Krueger, A. B. (2018). An analysis of the labor market for Uber’s driver-partners
in the United States. ILR Review, 71(3), 705-732.