Economic Barriers
to entry
When I was in Bhubaneswar for a month last year. It was
very difficult to catch an Uber or Ola. The Auto Union there didn’t want to
cooperate with the online taxi services. The reason was, the online taxi
services were charging a fair price, which ultimately lead to loss of customers
for the Auto Drivers. The Auto Union then reacted furiously, beating up the
Uber Drivers and damaging the taxis. This lasted almost for a week. After a
meeting of the two parties in the presence of the police, they compromised that
the online taxi services won’t pick up passengers at the Bus-stand, railway
stations and near the auto stands.
This shows the network effect as the barrier of entry for
online taxi services like Ola & Uber.
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