Taxi and Limousines: The Last Bastion of Economic Regulation
University of Denver Sturm College of Law
October 22, 2010
Hamline Journal of Public Law and Policy, Vol. 21, No. 319, 2000
As the airline industry and AT&T learned the hard way, legitimate profits based on the offering of superior service and lower prices are almost always higher than the illegitimate oligopoly profits earned in the cozy and lazy cocoon of the protected cartel. It can not be disputed that economic regulation that creates cartels, sets prices, and excludes competition, does inestimable harm to both the consumer and the public at large. What experience has shown, however, is that it does equal or greater harm to the protected producer, who grows complacent and stagnant. Anyone who lives in a regulated taxi environment such as New York City can test this conclusion. New York City has the largest transportation fleet in the world-12,000 taxicabs, 8,000 limousines and 30,000 cars for hire. By simply picking up a telephone and calling a taxi, documenting how long it takes to arrive and observing the condition of the taxi. The citizens of Indianapolis did just that, and they threw the economic regulators out-just as the people's representatives in Congress did with the regulators in the CAB and the ICC. Similar popular action will be necessary to achieve what the people did in Indianapolis. The regulators will never do it themselves. They never have and it is difficult to envision a scenario where they ever will.
One observer, commenting on the result of airline deregulation, frames a key consideration for those still-regulated industries. "There appears to be one fairly clear message in the rich empirical analysis of the past two turbulent decades in the airline industry that should influence the debate ahead: Where and when competition exists, consumers benefit; where and when it does not, they suffer.”
It has already been noted that the most extensive study of the taxi industry every conducted by the United States government concluded that "deregulating the cab industry would save $800 million and create 38,000 new jobs". Every day that regulators are permitted to delay their implementation of deregulation is the loss of irreparable resources and in the taxi and limousine industry the loss of thousands of potential jobs for hard working Americans.
Number of Pages in PDF File: 68Accepted Paper Series
Date posted: October 24, 2010
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