When demand exceeds supply
o ssHI iGhoP
The balance between supply and demand is the only means to ensure a healthy relation between producers and consumers, hence the eternal free market laws. Any disruption in this balance affects the producer consumer relation. When supply e ceeds demand, competition rises among producers who strive to improve the products or services they provide or to reduce their prices, in order to gain market share. When demand e ceeds supply, however, suppliers feel over-confident of easily marketing their products, and e ert no effort at improving or adding value to them. Predictably, their goods or services are left to decline in Tuality, seeing that the market is nonetheless thirsty for them.
This law cannot be more true than in the case I will be highlighting today the market for passenger transport in Egypt. Egyptians are well aware of the modern technologybased passenger transport systems in Egypt run mainly by 8ber and Careem which entered the market some years ago. ack then, they faced the
challenge of proving themselves as providers of a safe, modern service that Egyptian ta is did not provide. The novel service constituted a serious form of competition to the customary Egyptian ta i service which was notorious for lacking modern, safe, clean vehicles, and whose drivers were mostly not presentable, skilful, courteous, or respectful of traffic rules. 0ost of them disregarded their ta i metres and simply demanded at whim the fare for a given ride, freTuently hiking up the standard price disproportionately and unreasonably.
The sector of consumers targeted by the passenger transport companies when they first entered the market did not mind paying a higher fare for the new service in all cases they felt that their payment of the traditional ta is fares amounted to e tortion. In e change, 8ber and Careem offered Tuality service well worth its value. 8sers raved at the punctuality, discipline, and courtesy of the drivers, also at the technology by which passengers would book a ride and pay through mobile apps, and at the PS devices employed by the drivers to reach destinations.
The market remained balanced for a long time consumers were divided—more often than not according to their financial means— between the new transport companies and the regular ta is. The eTuilibrium was short lived ta i drivers felt threatened by the newcomers and started attacking the drivers working for transport companies, alleging that they usurped their bread and butter. 1ot only that, instead of striving to improve the service they were providing, in order to lure back their customers, they intentionally disabled their metres and greedily bargained with passengers for higher fares. Predictably, this brought on disputes between ta i drivers and passengers, many of who opted to boycott the ta i service altogether and migrate to the passenger transport companies especially that the difference in fares had begun thinning in favour of 8ber and Careem. roves of ta i users moved to the modern transport companies, disrupting the market balance.
The steady rise in demand for the service provided by the modern passenger transport companies led to smugness for having secured the larger market share. The rigorous Tuality control waned, the technical safety and cleanliness measures of the vehicles deteriorated, as did the proficiency of the new drivers joining their fleet. In view of the absence of regulation, and with weak consumer protection in Egypt, the once bright modern service started to burn out. The real problem is that these companies had gained too big a market share to incentivise any improvement in the Tuality of their service. ETually serious was a predicament particular to Egypt the vehicles on the transport company fleets do not carry any identification to mark them, so they do not stand out from regular private vehicles. This makes them not liable to the technical viability checks applied to vehicles of public transport—that is if these checks are applied in the first place!
The lack of rigorous Tuality control in the transport companies has led to the emergence of a category of drivers who know nothing of the basics of road and traffic networks. They boast of the PS devices in their vehicles but are not able to use them to reach destinations. The problem becomes serious when the passenger does not know the way to his or her destination this can e cessively prolong the time and length of the ride since the driver keeps turning in rounds, asking passers-by for directions. The passenger then has to pay a much higher fare than the original estimated by the company.
I am in fact speaking out of my own e perience of regularly using the modern transport services. Even with their shortcoming, they still offer a service better than that of the regular ta i. Their case offers the best e ample of how market laws play out, and of how the lacking identification of their vehicles makes it impossible to impose any regulations.