Tuesday, June 9, 2009

Bus or taxi? Real life econ

So apparently someone figured out that buses can transport more people for less money than taxis. So they set up a bus stop at one of the main squares in Kampala. We were walking around it looking for a taxi one evening and there must have been…oh gosh, upwards of a thousand people, standing around, hoping to catch a bus. Meanwhile, empty taxi’s were driving by. Crazy, eh? There were so many people, completely filling the long sidewalk and wrapped all the way up and around the corner. All to save the few hundred shillings by taking a bus. We weren’t able to locate a taxi going to Mukono so we went back to the huge taxi park (I have pictures up from last year, it’s a massive arena shaped parking lot crowded to the brim with taxis, it really is an experience to try to navigate your way through, it’s so crowded and disorienting, and has its own certain scent of…wet dirt, trash, and oil. I’ve been there many, many times and have yet to see another muzungu walking around, it’s all locals) Anyway, we found the Mukono spot but…no taxis! We had to wait a bit and when one drove up people RAN to the taxi. It was me, Caleb, and Rachel. I made the bad call of trying to swoop in from the side and just kept getting shoved farther to the side away from the sliding door; Caleb basically had to throw his whole body in front of the door to open up a space for me to slip in (poor guy, the number of idiotic muzugu mistakes I make that he has to cover for me for!). Amazingly, we all got spots on the taxi. Or not so amazingly. I looked around and realized the taxi was at minimum capacity of three to a bench, no one was double seated. At this time of day in Kampala they usually try to get 4, even 5, people to a bench. Had buses really crowded out the market that much? Apparently.
I couldn’t help but wonder how long it would last though. Just thinking about it a bit on the way back, I became curious how this would play out over the next couple months. The buses might be the better option right now, sure. But as the buses take over the transportation market, the taxis will start going out of business and subsequently start charging more to cover their costs, until the loss becomes so big they have to leave the market altogether. We were already starting to see it happen (it would make sense for them to charge less to try to compete with the buses, but we are starting to see them charge more). But then what? Then the buses have a monopoly on transportation and can’t boast themselves to be a cheap alternative to taxis. Rather, they can become more competitive among themselves and drive up the prices. Because they can. Before long, buses will be just as expensive as the taxis used to be, assuming gas stays relatively the same price and there isn’t some amazing increase in production technology or whatever. I don’t know. I might be comparing apples to oranges and I’ve never been great at econ, but it seems to make sense to me that while the buses might be a great alternative now, it’s only temporary. But then, since when do western economic models hold true in the developing world? Anything could happen.

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