Why compensation system develop in taxicab industry

Reference no: EM132179377

Question: Taxicab companies in the United States typically own a large number of cabs and licenses; the taxicab drivers then pay daily fees to the owners when they rent a cab. In return, drivers can keep their fares (so that, in essence, they receive a 100 percent commission on their sales). Why did this type of compensation system develop in the taxicab industry? Do the factors that lead to this compensation scheme for taxicab drivers lead to similar compensation systems in other industries that share the same underlying characteristics?

Reference no: EM132179377

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