Uber, a car-for-hire service that connects passengers with private drivers, presently operates in 613 cities worldwide. Lower overheads allow Uber to charge significantly less than a taxi company would charge for an equivalent ride, due in part to lower or nonexistent city licence fees. Taxi companies argue that this advantage for Uber and other ridebooking companies has adversely affected their businesses. If the market for car-for-hire services was perfectly competitive, what effect did the entry of Uber have? What would be the effect on taxi companies of reducing the annual licencing fee levied by the local authority?