Plunge and Rebound of a Taxi Market Through COVID-19 Lockdown: Lessons Learned From Shenzhen, China

28 Pages Posted: 16 Aug 2020 Last revised: 29 Jun 2021

See all articles by Hongyu Zheng

Hongyu Zheng

Northwestern University

Kenan Zhang

Northwestern University

Marco Nie

Northwestern University

Date Written: August 14, 2020

Abstract

This paper traces the plunge and rebound of the taxi market in Shenzhen, China through the COVID-19 lockdown. A four-week taxi GPS trajectory data set is collected in the first quarter of 2020, which covers the period of lockdown and phased reopening in the city. We conduct a spatiotemporal analysis of taxi demand using the data, and then select taxis that continued to operate through the analysis period to examine whether and how they adjusted operational strategies. We find, among other things: (i) the taxi demand in Shenzhen shrank more than 85% in the lockdown phase and barely recovered from that bottom even after the city began to reopen; (ii) the recovery of taxi travel fell far behind that of the overall vehicle travel in the city; (iii) most taxis significantly cut back work hours in response to the lockdown, and many adjusted work schedule to focus on serving peak-time demand after it was lifted; (iv) taxi drivers demonstrate distinct behavioral adaptations to the pandemic that can be identified by a clustering analysis; and (v) while the level of taxi service dropped precipitately at the beginning, it quickly rebounded to exceed the pre-pandemic level, thanks to the government's incentive policy. These empirical findings suggest (i) incentives aiming at boosting supply should more precisely target where the boost is most needed; (ii) the taxi market conditions should be closely monitored to support and adjust policies; and (iii) when the demand is severely depressed by lockdown orders or when the market is oversupplied, taxi drivers should be encouraged and aided to use more centralized dispatching modes.

Keywords: COVID-19 pandemic, taxi industry, GPS trajectory, clustering

Suggested Citation

Zheng, Hongyu and Zhang, Kenan and Nie, Marco, Plunge and Rebound of a Taxi Market Through COVID-19 Lockdown: Lessons Learned From Shenzhen, China (August 14, 2020). Available at SSRN: https://ssrn.com/abstract=3674241 or http://dx.doi.org/10.2139/ssrn.3674241

Hongyu Zheng

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Kenan Zhang

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Marco Nie (Contact Author)

Northwestern University ( email )

2145 Sheridan Road
Evanston, IL 60208-1230
United States

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