Changes in real incomes and the demand for taxicabs

This paper comments on the possible future of the taxicab industry within the context of a familiar economic-growth model. The future capability of the taxicab industry to check increases in real costs is shown to be an important determinant in the industry's long-term viability. More importantly, the effect of rising real incomes on the demand for taxicabs is postulated also to have a strong effect on future demand. The strength of this effect and the exact position of the taxicab in the transit tree have important implications not only for the future demand for taxis but also for the more traditional modes of public transport.